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GILTS: Friday’s Late Uptick Reversed

GILTS
Bullet

Gilts soften alongside core global FI peers before finding a base.

  • ECB’s Nagel provided customary hawkish rhetoric, although bonds were already softening before the comment, with EUR STIRs seeing contained hawkish adjustments.
  • Note that the early weakness has merely unwound Friday’s late uptick.
  • Gilt futures last -2 at 93.74 vs. lows of 93.64, comfortably within Friday’s range, technical setup still bearish.
  • Initial support at the November 14 low (92.97), while resistance is located at the 20-day EMA (94.64).
  • Yields little changed across the curve.
  • 10s see ~0.5bp of outperformance vs. Bunds, spread remains close to cycle highs, last ~211bp.
  • SONIA futures flat to -2.0, BoE-dated OIS in line with levels covered earlier.
  • CPI data headlines this week’s UK calendar. See pre-gilt open STIR bullet for more colour and expect our preview of the release to cross on Tuesday.
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Gilts soften alongside core global FI peers before finding a base.

  • ECB’s Nagel provided customary hawkish rhetoric, although bonds were already softening before the comment, with EUR STIRs seeing contained hawkish adjustments.
  • Note that the early weakness has merely unwound Friday’s late uptick.
  • Gilt futures last -2 at 93.74 vs. lows of 93.64, comfortably within Friday’s range, technical setup still bearish.
  • Initial support at the November 14 low (92.97), while resistance is located at the 20-day EMA (94.64).
  • Yields little changed across the curve.
  • 10s see ~0.5bp of outperformance vs. Bunds, spread remains close to cycle highs, last ~211bp.
  • SONIA futures flat to -2.0, BoE-dated OIS in line with levels covered earlier.
  • CPI data headlines this week’s UK calendar. See pre-gilt open STIR bullet for more colour and expect our preview of the release to cross on Tuesday.