Holding Firmer

Gilts remain underpinned as yesterday’s recovery extends, with bulls pushing the contract as high as 97.20, before a fade to 97.05.

• Yields are 3-5bp lower, bull steepening seen on the curve.
• Adjustments to late Wednesday developments in wider core global FI markets and lower benchmark energy prices dominate, even as geopolitical angst eases a little (granted, that is the driver of lower energy prices today).
• Futures have cleared initial technical resistance, with little in the way of meaningful upside technical levels seen until the April 12 high (98.23).
• Still, bears remain in technical control as long as the contract trades below the April 12 peak.
• SONIA futures hold firmer in the main, although sit a little shy of best levels, last flat to +6.5.
• BoE-dated OIS sits off the most dovish levels of the session, but are still comfortably off post-CPI extremes, showing ~45bp of ’24 cuts.
• Sell-side names continue to adjust BoE calls in lieu of the recent UK data.
• BoE’s Greene will speak again today, but we have heard from her on several occasions over the last week or so.
• That will likely leave focus on cross-market and macro matters.