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GILTS: Wider As Citi Provide Fiscal Warning, Technical Levels Probed

GILTS
CEEMEABulletUKGlobalFixed Income BulletsRegionMarkets

Gilts widen vs. core global FI peers after Citi’s (caveated) warning surrounding market spill over from funding a potential increase in public investment.

  • Futures probed initial support at Tuesday’s low (96.20), but only manage a modest breach, basing at 96.19. Last 96.28.
  • An extension lower would allow the bearish impulse to strengthen further, targeting round number support at 96.00.
  • Cash 10s topped out at 4.225% vs. Tuesday’s high of 4.221%.
  • An extension would target the July 1 high (4.286%).
  • 10s widen by a little over 2bp vs. Bunds, back towards 195bp. This week’s closing cycle high (195.24bp) is less than 1bp away.
  • GBP STIRs see hawkish adjustments alongside the weakness in gilts.
  • 21bp of cuts priced for November, 34bp of cuts priced through December and 91bp of cuts priced through June.
  • That compares to 22bp, 35bp and 94bp late Wednesday.
  • SONIA futures 1.0-4.0 lower.
  • Most contracts through SFIH6 register fresh multi-week/month lows.
  • Fiscal speculation will continue to dominate today, with no tier 1 UK releases scheduled.
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Gilts widen vs. core global FI peers after Citi’s (caveated) warning surrounding market spill over from funding a potential increase in public investment.

  • Futures probed initial support at Tuesday’s low (96.20), but only manage a modest breach, basing at 96.19. Last 96.28.
  • An extension lower would allow the bearish impulse to strengthen further, targeting round number support at 96.00.
  • Cash 10s topped out at 4.225% vs. Tuesday’s high of 4.221%.
  • An extension would target the July 1 high (4.286%).
  • 10s widen by a little over 2bp vs. Bunds, back towards 195bp. This week’s closing cycle high (195.24bp) is less than 1bp away.
  • GBP STIRs see hawkish adjustments alongside the weakness in gilts.
  • 21bp of cuts priced for November, 34bp of cuts priced through December and 91bp of cuts priced through June.
  • That compares to 22bp, 35bp and 94bp late Wednesday.
  • SONIA futures 1.0-4.0 lower.
  • Most contracts through SFIH6 register fresh multi-week/month lows.
  • Fiscal speculation will continue to dominate today, with no tier 1 UK releases scheduled.