MNI China Daily Summary: Monday, November 18

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CHINA PBOC CONDUCTS CNY172.6 BLN VIA 7-DAY REVERSE REPOS MON

Japan Sep Machine Orders -0.7% M/M

EZ/UK Bond Supply Calendar: EU Synd; SK, BE Auction on Monday

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MNI EXCLUSIVE: German Turmoil Dashes EU's Joint-Funding Hopes -Officials

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GILTS: Weaker Alongside Peers, Outperforming Bunds

GILTS
CEEMEABulletUKGlobalFixed Income BulletsRegionMarkets

Weakness in core global FI peers has weighed on gilts today, with hawkish repricing in the front end of the EUR curve noted (ECB-dated OIS still prices 5x 25bp cuts over the next 5 meetings, with risk of 50bp moves seen over the next 3).

  • Some typically hawkish comments from ECB’s Nagel this morning, but markets were moving ahead of that.
  • No real UK drivers of note.
  • Gilt futures traded to fresh session lows of 93.46 recently but stick comfortably within Friday’s range.
  • Technical setup for the contract remains bearish.
  • Initial support at the November 14 low (92.97), while resistance is located at the 20-day EMA (94.64).
  • Yields 2-4bp higher, curve flattens.
  • Outperformance vs. Bunds has pulled the 10-Year spread below 210bp, a little over 1.5bp tighter on the day. Spread remains under 10bp off closing cycle highs.
  • 5s30s 57.8bp last vs. November multi-month lows at 45.2bp.
  • BoE-dated OIS shows 2.5bp of cuts for next month, 19.5bp through February, 26bp through March, 45bp through June and 63bp through December ’25, with the bulk of the hawkish post-Budget repricing still holding.
  • Contracts little changed to ~4bp less dovish on the day. Next 25bp cut fully discounted for the March MPC.
  • SONIA futures flat to -4.5.
  • Comments from BoE’s Greene due after the close today.
  • Wednesday’s CPI data headlines this week’s UK calendar (expect our full CPI preview Tuesday).
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Weakness in core global FI peers has weighed on gilts today, with hawkish repricing in the front end of the EUR curve noted (ECB-dated OIS still prices 5x 25bp cuts over the next 5 meetings, with risk of 50bp moves seen over the next 3).

  • Some typically hawkish comments from ECB’s Nagel this morning, but markets were moving ahead of that.
  • No real UK drivers of note.
  • Gilt futures traded to fresh session lows of 93.46 recently but stick comfortably within Friday’s range.
  • Technical setup for the contract remains bearish.
  • Initial support at the November 14 low (92.97), while resistance is located at the 20-day EMA (94.64).
  • Yields 2-4bp higher, curve flattens.
  • Outperformance vs. Bunds has pulled the 10-Year spread below 210bp, a little over 1.5bp tighter on the day. Spread remains under 10bp off closing cycle highs.
  • 5s30s 57.8bp last vs. November multi-month lows at 45.2bp.
  • BoE-dated OIS shows 2.5bp of cuts for next month, 19.5bp through February, 26bp through March, 45bp through June and 63bp through December ’25, with the bulk of the hawkish post-Budget repricing still holding.
  • Contracts little changed to ~4bp less dovish on the day. Next 25bp cut fully discounted for the March MPC.
  • SONIA futures flat to -4.5.
  • Comments from BoE’s Greene due after the close today.
  • Wednesday’s CPI data headlines this week’s UK calendar (expect our full CPI preview Tuesday).