GILTS: Off Highs As Equities Recover

Gilts take cues from core global FI peers, early rally fading a little as equities recover from session lows.

• Futures +3 at 101.09 vs. highs of 101.30, sticking within Thursday’s range for a second day.
• Technicals remain bullish, initial resistance at the Sep 12 high (101.51), initial support at the Sep 10 high (100.64).
• Yields little changed to 1bp higher across the curve, light steepening.
• 10-Year yields hover just above a key support cluster ahead of this week’s event risk.
• UK CPI (Wednesday) & the BoE decision (Thursday) headline the UK calendar this week, while the latest FOMC decision tops the macro calendar (due Wednesday, unusually split market pricing of 25/50bp cut following last week’s dovish press articles).
• SONIA futures +2.5 to -0.5, SFIH5 respects August high.
• BoE-dated OIS little changed to 2.5bp more dovish through mid-’25, 5bp of cuts priced for this week, ~52bp showing through year end and ~139bp if easing priced through June ’25.
• Note that the BoE will sell GBP725mln of medium-dated gilts from its APF this afternoon.