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Holding Firmer Post-PMIs

GILTS

Gilt futures nudge away from best levels registered around the time of the softer than expected flash PMI data, with stagflation/recession worry already becoming more prominent amid the BoE’s tightening cycle (although pay growth provides at least some insulation, for now). That leaves the contract +150 ticks or so on the day, while cash Gilts are 6-13bp richer, with 10s leading the bid as the 2-/10-Year spread moves to fresh cycle extremes, representing multi-decade deeps when it comes to the level of inversion. Terminal BoE-dated OIS pricing resides around the 6.15% level in policy rate terms.

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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