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GILTS: Fading From PMI-Driven Highs

GILTS
CEEMEABulletUKGlobalFixed Income BulletsRegionMarkets

Futures tested 100.00 after UK PMIs added to the soft run of survey readings seen this morning, but the contract now sits below pre-release levels, last ~99.80.

  • Yields 0.5-5.0bp lower across the curve, a little above pre-data levels.
  • We noted that there was some downside risk to the PMIs on the back of the European readings/UK GfK consumer confidence data, making the miss less of a ‘surprise’ and helping explain the market reaction.
  • All in all, the data supports the idea a November cut from the BoE but shouldn't move the dial too much for December at this stage.
  • STIR markets agree with this assessment, showing 42bp of cuts through year-end and ~130bp of cuts through June ’25 vs. ~41bp and ~129bp at the time of our post-gilt open update.
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Futures tested 100.00 after UK PMIs added to the soft run of survey readings seen this morning, but the contract now sits below pre-release levels, last ~99.80.

  • Yields 0.5-5.0bp lower across the curve, a little above pre-data levels.
  • We noted that there was some downside risk to the PMIs on the back of the European readings/UK GfK consumer confidence data, making the miss less of a ‘surprise’ and helping explain the market reaction.
  • All in all, the data supports the idea a November cut from the BoE but shouldn't move the dial too much for December at this stage.
  • STIR markets agree with this assessment, showing 42bp of cuts through year-end and ~130bp of cuts through June ’25 vs. ~41bp and ~129bp at the time of our post-gilt open update.