GILTS: Remaining Under Pressure On Hawkish Central Bank Speak, Ranges Intact

Hawkish Fed and BoE speak has weighed on core global FI markets.

• Gilt futures last -22 at 99.54 (99.48-73 range).
• The recent range in the contract remains intact, initial technical levels are untouched.
• Cash gilt yields are 2-4bp higher across the curve, 5s lead the sell off.
• 10s remain sub-4.00% (last ~3.96%).
• 2s10s and 5s30s remain in month-to-date ranges.
• SONIA futures 0.5 to 5.0 lower, reds under the most pressure.
• BoE-dated OIS prices ~71bp of ’24 cuts, moving back towards recent hawkish extremes, although the 70bp level holds firm for now.
• Final Q4 GDP data did little for gilts, with a UK technical recession confirmed.
• The local calendar is virtually empty ahead of the elongated Easter weekend.
• Month-end extensions for gilts are expected to be sizeable, while global quarter-end portfolio reallocation flows are expected to be bond +ve and equity -ve.