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GILTS: Recovering From Lows Alongside EGBs

GILTS
CEEMEABulletUKGlobalFixed Income BulletsRegionMarkets

Some of the early pressure that followed firmer-than-expected UK retail sales data fades, spill over from a recovery from session lows in EGBs helps limit losses.

  • Futures last +1 at 97.50 vs. lows of 97.27.
  • Wednesday’s opening gap higher still isn’t closed, initial support at the Oct 15 high (96.97).
  • Bulls failed to take out key near-term resistance at the September 2 low (98.11) over the past couple of sessions, leaving the bearish technical theme intact.
  • Yields 0.5-2.0bp higher across the curve, steepening. 2s10s and 5s30s within multi-week ranges.
  • Gilts widen by nearly ~3bp vs. Bunds, spread above 190bp after the pullback from cycle highs above 195bp in recent sessions.
  • Shallow early hawkish moves in GBP STIRs fade, dovish moves in ECB pricing factoring in.
  • BoE-dated OIS now prices 24bp of cuts for November, 41bp through November and 114bp through June, flat to 1bp more dovish on the day.
  • SONIA futures +2.0 to -0.5.
  • A reminder that we don’t think the breakdown of today’s retail sales data (computer and telecommunications the main driver of the surprise) really signals any change in strength of the UK consumer and hence see little feedthrough for monetary policy.
  • Little of note on the UK calendar ahead of the weekend, which should leave cross-market spill over and macro news front and centre.
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Some of the early pressure that followed firmer-than-expected UK retail sales data fades, spill over from a recovery from session lows in EGBs helps limit losses.

  • Futures last +1 at 97.50 vs. lows of 97.27.
  • Wednesday’s opening gap higher still isn’t closed, initial support at the Oct 15 high (96.97).
  • Bulls failed to take out key near-term resistance at the September 2 low (98.11) over the past couple of sessions, leaving the bearish technical theme intact.
  • Yields 0.5-2.0bp higher across the curve, steepening. 2s10s and 5s30s within multi-week ranges.
  • Gilts widen by nearly ~3bp vs. Bunds, spread above 190bp after the pullback from cycle highs above 195bp in recent sessions.
  • Shallow early hawkish moves in GBP STIRs fade, dovish moves in ECB pricing factoring in.
  • BoE-dated OIS now prices 24bp of cuts for November, 41bp through November and 114bp through June, flat to 1bp more dovish on the day.
  • SONIA futures +2.0 to -0.5.
  • A reminder that we don’t think the breakdown of today’s retail sales data (computer and telecommunications the main driver of the surprise) really signals any change in strength of the UK consumer and hence see little feedthrough for monetary policy.
  • Little of note on the UK calendar ahead of the weekend, which should leave cross-market spill over and macro news front and centre.