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GILTS: Rally Extends Further, Curve Bull Steepens

GILTS
CEEMEABulletUKGlobalFixed Income BulletsRegionMarkets

The rally in gilt futures has extended through round number resistance at 101.00, with the contract trading as high as 101.26.

  • Softer-than-expected UK data added to the broader FI bid that was seen in Asia following the Harris-Trump debate.
  • The data allowed the recent cross-market outperformance vs. Bunds to extend: https://marketnews.com/bonds-gilts-extend-recent-tightening-vs-bunds
  • Bullish technical control deepens further on the move, with next resistance in futures noted at the August 5 high (101.46).
  • The lack of concession for 10s made for relatively soft pricing and cover metrics at the latest DMO 10-Year supply, although pullbacks were limited.
  • Yields 4.0-6.5bp lower, bull steepening.
  • 30s and 50s probed early August risk-off lows, but gilt bulls have failed to force meaningful breaks there as of yet.
  • SONIA futures have extended their early rally, last flat to +10.0, a little off session highs. M5 through H6 through early August peaks.
  • BoE-dated OIS shows 48bp of cuts through year-end and ~134bp through Jun ’25 vs. closer to 45bp and 128bp late Tuesday.
  • U.S. CPI dominates the macro calendar today.

BoE Meeting

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The rally in gilt futures has extended through round number resistance at 101.00, with the contract trading as high as 101.26.

  • Softer-than-expected UK data added to the broader FI bid that was seen in Asia following the Harris-Trump debate.
  • The data allowed the recent cross-market outperformance vs. Bunds to extend: https://marketnews.com/bonds-gilts-extend-recent-tightening-vs-bunds
  • Bullish technical control deepens further on the move, with next resistance in futures noted at the August 5 high (101.46).
  • The lack of concession for 10s made for relatively soft pricing and cover metrics at the latest DMO 10-Year supply, although pullbacks were limited.
  • Yields 4.0-6.5bp lower, bull steepening.
  • 30s and 50s probed early August risk-off lows, but gilt bulls have failed to force meaningful breaks there as of yet.
  • SONIA futures have extended their early rally, last flat to +10.0, a little off session highs. M5 through H6 through early August peaks.
  • BoE-dated OIS shows 48bp of cuts through year-end and ~134bp through Jun ’25 vs. closer to 45bp and 128bp late Tuesday.
  • U.S. CPI dominates the macro calendar today.

BoE Meeting

Keep reading...Show less