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Divergence With CNH Persists

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Higher yields across the curve

GILTS
  • The continued move higher in natgas prices has added to downside momentum for gilts, with yields making new cycle highs across the curve.
  • Gilt futures have breached the 91.47 level (76.4% retracement of the 1990 - 2020 major bull cycle) trading to a low of 90.99 this morning but are now once again flirting with the retracement level at 91.50 at writing.
  • There has been a marginal steepening of the 10s30s curve, but remains below yesterday's 53.4bp high and below the 59.6bp cycle high seen ahead of the August MPC meeting.
  • 2s10s are a little flatter on the day and remain inverted, down 0.9bp at -15.9bp but a long way off the -46.2bp low of Monday.
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  • The continued move higher in natgas prices has added to downside momentum for gilts, with yields making new cycle highs across the curve.
  • Gilt futures have breached the 91.47 level (76.4% retracement of the 1990 - 2020 major bull cycle) trading to a low of 90.99 this morning but are now once again flirting with the retracement level at 91.50 at writing.
  • There has been a marginal steepening of the 10s30s curve, but remains below yesterday's 53.4bp high and below the 59.6bp cycle high seen ahead of the August MPC meeting.
  • 2s10s are a little flatter on the day and remain inverted, down 0.9bp at -15.9bp but a long way off the -46.2bp low of Monday.