Free Trial

GILTS: Pullback From PMI-Driven High Extends

GILTS

Gilts extend their pullback from session highs.

  • Bulls tested 100.00 in futures after UK PMIs added to the soft run of survey readings seen this morning, before easing to 99.60.
  • The bullish technical picture remains intact in the contract, despite the recent correction.
  • Bulls ultimately need to break the Sep 17 high (101.54) to reignite the uptrend.
  • Yields little changed to 2.5bp lower on the day, curve steepening.
  • 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 41bp of cuts through year-end and ~128bp of cuts through June ’25, little changed from early Monday levels.
  • SONIA futures last 0.5-6.0 higher on the day, back from highs, with much of the rally coming after settlement on Friday.
  • Comments from Chancellor Reeves are now eyed, we wrote a little more on that here.
181 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.

Gilts extend their pullback from session highs.

  • Bulls tested 100.00 in futures after UK PMIs added to the soft run of survey readings seen this morning, before easing to 99.60.
  • The bullish technical picture remains intact in the contract, despite the recent correction.
  • Bulls ultimately need to break the Sep 17 high (101.54) to reignite the uptrend.
  • Yields little changed to 2.5bp lower on the day, curve steepening.
  • 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 41bp of cuts through year-end and ~128bp of cuts through June ’25, little changed from early Monday levels.
  • SONIA futures last 0.5-6.0 higher on the day, back from highs, with much of the rally coming after settlement on Friday.
  • Comments from Chancellor Reeves are now eyed, we wrote a little more on that here.