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GILTS: Outperforming After Dovish Bailey Comments

GILTS
CEEMEABulletUKGlobalFixed Income BulletsRegionMarkets

Gilts outperform core global FI peers in the wake of BoE Governor Bailey outlining the prospect of the Bank becoming a bit more aggressive with rate cuts provided the news on inflation continued to be good (see earlier bullets for our thoughts on Bailey’s comments).

  • Futures +35 at 98.43 after yesterday’s sell off saw a shallow move below 98.00.
  • The bearish technical threat in the contract remains evident despite today’s early uptick, although the prospect of a swifter BoE rate cutting cycle could change things.
  • Yesterday’s low (97.97) provides initial support, while bulls really need to overcome the Oct 1 high (99.47) to start turning the technical tide more in their favour.
  • 10-Year gilt/Bunds back below 190bp, narrowing by 5bp from cycle wides registered on Wednesday.
  • Yields little changed to 5bp lower, curve bull steepens.
  • BoE-dated OIS holds much of the early dovish adjustments, 25bp of cuts priced for November, 42bp of cuts priced for December and 124bp of cuts priced through June ’25.
  • SONIA futures back from early highs, last 1-11.5bp firmer.
  • The BoE DMP survey and final services PMI data is due today.
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Gilts outperform core global FI peers in the wake of BoE Governor Bailey outlining the prospect of the Bank becoming a bit more aggressive with rate cuts provided the news on inflation continued to be good (see earlier bullets for our thoughts on Bailey’s comments).

  • Futures +35 at 98.43 after yesterday’s sell off saw a shallow move below 98.00.
  • The bearish technical threat in the contract remains evident despite today’s early uptick, although the prospect of a swifter BoE rate cutting cycle could change things.
  • Yesterday’s low (97.97) provides initial support, while bulls really need to overcome the Oct 1 high (99.47) to start turning the technical tide more in their favour.
  • 10-Year gilt/Bunds back below 190bp, narrowing by 5bp from cycle wides registered on Wednesday.
  • Yields little changed to 5bp lower, curve bull steepens.
  • BoE-dated OIS holds much of the early dovish adjustments, 25bp of cuts priced for November, 42bp of cuts priced for December and 124bp of cuts priced through June ’25.
  • SONIA futures back from early highs, last 1-11.5bp firmer.
  • The BoE DMP survey and final services PMI data is due today.