Holding Firmer, Macro Still Dominates

Gilts hold their early rally, sticking comfortably within Friday’s ranges across the curve.

• Macro cues continue to drive gilts, with the uptick in wider bond markets dominating thus far.
• Futures last +24 at 100.09 vs. session highs of 100.12.
• Technical trend structure in the contract remains bullish, initial resistance at last week’s high (100.80).
• Yields ~3bp lower across the curve.
• SONIA futures flat to +2.5.
• BoE-dated OIS sits little changed to ~3bp more dovish on the day, showing ~7bp of cuts for Sep & ~41.5bp of cuts through Dec.
• Looking ahead, the BoE will sell GBP725mn of medium-term gilts from its APF later today.
• Thursday’s flash PMI data headlines this week’s local data calendar.
• Finally, BoE Governor Bailey will speak from Jackson Hole on Friday.