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GILTS: Wider Early This Week, Issuance Risks Eyed

GILTS
CEEMEABulletUKGlobalFixed Income BulletsRegionMarkets

Futures +6 at 96.33 vs. early lows of 96.21, holding the bulk of the sell off seen at the open.

  • Contract sticks within Friday’s range, with the bearish technical cycle intact.
  • Support at the Oct 10 low (95.83), resistance at the Oct 7 high (96.93).
  • Yields 1bp lower to 1bp higher, curve twist steepens.
  • Cross-market plays continue to generate attention ahead of the October 30 Budget.
  • 10-Year spread to Bunds back above 195bp, focus on last week’s cycle closing wide, which protects the psychological 200bp level.
  • Chancellor Reeves reiterated the need to focus on the benefits of any public investment as opposed to the outright cost. While her piece in the Times didn’t offer much ‘new’, markets remain highly sensitive to the risk of greater issuance surrounding any such investment, potentially explaining this morning’s weakness/spread widening.
  • Elsewhere, weekend comments from the Business & Trade Secretary added to speculation that the government is planning to levy a national insurance increase on businesses.
  • BoE dovish dissenter Dhingra speaks on a panel at an RBI event this morning, but we may not hear anything on BoE policy given the setting.
  • Elsewhere, the BoE will sell GBP800mln of short maturity gilts from its APF.
  • This week’s UK calendar will be headlined by the CPI & labour market reports, covered in greater detail in our morning STIR bullet (full preview due later).
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Futures +6 at 96.33 vs. early lows of 96.21, holding the bulk of the sell off seen at the open.

  • Contract sticks within Friday’s range, with the bearish technical cycle intact.
  • Support at the Oct 10 low (95.83), resistance at the Oct 7 high (96.93).
  • Yields 1bp lower to 1bp higher, curve twist steepens.
  • Cross-market plays continue to generate attention ahead of the October 30 Budget.
  • 10-Year spread to Bunds back above 195bp, focus on last week’s cycle closing wide, which protects the psychological 200bp level.
  • Chancellor Reeves reiterated the need to focus on the benefits of any public investment as opposed to the outright cost. While her piece in the Times didn’t offer much ‘new’, markets remain highly sensitive to the risk of greater issuance surrounding any such investment, potentially explaining this morning’s weakness/spread widening.
  • Elsewhere, weekend comments from the Business & Trade Secretary added to speculation that the government is planning to levy a national insurance increase on businesses.
  • BoE dovish dissenter Dhingra speaks on a panel at an RBI event this morning, but we may not hear anything on BoE policy given the setting.
  • Elsewhere, the BoE will sell GBP800mln of short maturity gilts from its APF.
  • This week’s UK calendar will be headlined by the CPI & labour market reports, covered in greater detail in our morning STIR bullet (full preview due later).