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GILTS: Soft Demand At Auction Adds To Early Weakness

GILTS
CEEMEABulletUKGlobalFixed Income BulletsRegionMarkets

Soft demand at the latest 5-Year gilt auction allows early weakness to extend a little further.

  • Gilt widener interest vs. Bunds and set up ahead of the supply added to a sell off in core global FI markets early today, with the latter seemingly driven by an unwind of geopolitical risk premium.
  • Futures trade as low as 98.36, initial support at Monday’s low (98.30) still untested. A break there would deepen the bearish threat and expose key support at the September 2 low (98.11).
  • Yields 6-7bp higher, 10s lead the move.
  • BoE-dated OIS 0.5-6.5bp more hawkish through mid-’25 contracts. 23bp of cuts priced through November, 36bp priced through December and 114bp of cuts showing through June ’25.
  • SONIA futures flat to -7.5, 
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Soft demand at the latest 5-Year gilt auction allows early weakness to extend a little further.

  • Gilt widener interest vs. Bunds and set up ahead of the supply added to a sell off in core global FI markets early today, with the latter seemingly driven by an unwind of geopolitical risk premium.
  • Futures trade as low as 98.36, initial support at Monday’s low (98.30) still untested. A break there would deepen the bearish threat and expose key support at the September 2 low (98.11).
  • Yields 6-7bp higher, 10s lead the move.
  • BoE-dated OIS 0.5-6.5bp more hawkish through mid-’25 contracts. 23bp of cuts priced through November, 36bp priced through December and 114bp of cuts showing through June ’25.
  • SONIA futures flat to -7.5,