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GILTS: Equity Rally Weighs, Swelling IG Issuance Limits Any Recoveries

GILTS
CEEMEABulletUKGlobalFixed Income BulletsRegionMarkets

Spill over from swelling EUR & GBP IG issuance pipelines has limited recoveries in gilts, with a recovery from Friday’s lows in equity markets providing most of the selling pressure.

  • Futures last -62 at 99.35 vs. lows of 99.29.
  • Technical set up in the contract remains bullish, support at the 20-day EMA (99.08).
  • Yields 3.5-5.0bp higher on the day, 10s lead the sell off.
  • The DMO has opened the consultation for a tender of a gilt with a sub-3 year maturity this morning. It has requested feedback by 15:30 today, with Thursday flagged as a potential operation date. No tangible impact on the front end, at least when it comes to RV performance on the curve, with plans for such an operation outlined in the DMO’s quarterly issuance calendar.
  • SONIA futures at/just off lows, flat to -7.0.
  • BoE-dated OIS shows ~43.5bp of cuts through year end, little changed on the da
  • BoE will sell GBP650mn of long dated gilts from its APF this afternoon.
  • Looking ahead, the monthly labour market report (Tuesday) & GDP data (Wednesday) headline this week’s UK data releases.

BoE Meeting

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Spill over from swelling EUR & GBP IG issuance pipelines has limited recoveries in gilts, with a recovery from Friday’s lows in equity markets providing most of the selling pressure.

  • Futures last -62 at 99.35 vs. lows of 99.29.
  • Technical set up in the contract remains bullish, support at the 20-day EMA (99.08).
  • Yields 3.5-5.0bp higher on the day, 10s lead the sell off.
  • The DMO has opened the consultation for a tender of a gilt with a sub-3 year maturity this morning. It has requested feedback by 15:30 today, with Thursday flagged as a potential operation date. No tangible impact on the front end, at least when it comes to RV performance on the curve, with plans for such an operation outlined in the DMO’s quarterly issuance calendar.
  • SONIA futures at/just off lows, flat to -7.0.
  • BoE-dated OIS shows ~43.5bp of cuts through year end, little changed on the da
  • BoE will sell GBP650mn of long dated gilts from its APF this afternoon.
  • Looking ahead, the monthly labour market report (Tuesday) & GDP data (Wednesday) headline this week’s UK data releases.

BoE Meeting

Keep reading...Show less