April 16, 2024 09:22 GMT
Holding Lower, BoE Speak & CPI Eyed after Hot Wage Data
GILTS
This mornings’ firmer-than-expected wage data keeps the pressure on gilts, with futures registering fresh lows in recent trade (96.44), moving closer to the next technical support level (96.30) in the process.
- Cash gilt yields are 2.0-3.5bp higher across the curve.
- 2s test April yield highs, while 10s register fresh year-to-date yield highs, with the latter now eying the Nov 24 high (4.323%).
- 10s closed above their 200-DMA yesterday, representing the first such close since December.
- Nov-33 I/L gilt supply was well received.
- SONIA futures are flat to 6.0 lower, just off session lows.
- BoE-dated OIS shows ~47bp of ’24 cuts vs. a little over 50bp late Monday. The first 25bp is still fully discounted come the end of the September MPC.
- Immediate focus moves to impending comments from incoming BoE Deputy Governor Lombardelli, with comments from Governor Bailey due later on Tuesday (click for more on both addresses).
- Data-wise, the next release of note comes in the form of tomorrow’s CPI data, with a particular focus on services inflation and the ‘Easter impact.’
- Click for our full preview of that release.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference Vs. Current Effective SONIA Rate (bp) |
May-24 | 5.183 | -1.5 |
Jun-24 | 5.111 | -8.8 |
Aug-24 | 5.000 | -19.8 |
Sep-24 | 4.926 | -27.2 |
Nov-24 | 4.813 | -38.5 |
Dec-24 | 4.730 | -46.9 |
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