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GILTS: Holding Onto Most Of Early Rally, BoE's Pill Due Later

GILTS
CEEMEABulletUKGlobalFixed Income BulletsRegionMarkets

Gilts hold onto the bulk of the rally triggered by late Thursday demand in Tsys and risk-off trade surrounding Chinese fiscal policy.

  • Futures +46 at 93.97 vs. highs of 94.21.
  • Initial resistance at the November 1 high (94.73) is untested, with the bearish technical theme still in play.
  • Yields 3.0-4.5bp lower across the curve.
  • 10- to 30-Year zone outperforms wings.
  • Spreads to Bunds little changed at ~206bp, following yesterday’s sharp narrowing off cycle highs (which was mostly driven by the German leg).
  • BoE-dated OIS shows 4bp of cuts for December, 22bp of easing through February, 31bp through March and 47bp through May, little changed vs. pre-gilt open levels, pointing to quarterly cuts in the immediate term.
  • SONIA futures -1.5 to +7.0, easing from session highs as the bid in gilts moderates a little.
  • BoE chief economist Pill will speak later today (12:15 London), giving a briefing on the latest monetary policy decision.
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Gilts hold onto the bulk of the rally triggered by late Thursday demand in Tsys and risk-off trade surrounding Chinese fiscal policy.

  • Futures +46 at 93.97 vs. highs of 94.21.
  • Initial resistance at the November 1 high (94.73) is untested, with the bearish technical theme still in play.
  • Yields 3.0-4.5bp lower across the curve.
  • 10- to 30-Year zone outperforms wings.
  • Spreads to Bunds little changed at ~206bp, following yesterday’s sharp narrowing off cycle highs (which was mostly driven by the German leg).
  • BoE-dated OIS shows 4bp of cuts for December, 22bp of easing through February, 31bp through March and 47bp through May, little changed vs. pre-gilt open levels, pointing to quarterly cuts in the immediate term.
  • SONIA futures -1.5 to +7.0, easing from session highs as the bid in gilts moderates a little.
  • BoE chief economist Pill will speak later today (12:15 London), giving a briefing on the latest monetary policy decision.