Initial Resistance Caps Rally In Futures

Gilts futures play catch up to the late Thursday rally in wider core global FI markets before bulls fail to meaningfully breach initial resistance (96.57).

• Highs of 96.58 were seen before a pullback to 96.45, +10 on the day.
• The bearish technical backdrop remains in the contract, with bulls needing to overcome initial meaningful resistance at the 20-day EMA (96.85).
• Yields are little changed across the curve.
• Local headline flow has been dominated by political matters, with the ruling Conservative Party losing a seat in a by-election and struggling in local elections.
• A reminder that previous speculation pointed to a potential leadership challenge for PM Sunak in the wake of poor results.
• Elsewhere, a senior economist at the Resolution Foundation (formerly of the BoE) told our policy team that the BoE faces deeper rate cuts owing to the impact of savings (click for full story)
• Final services PMI data headlines a limited UK calendar.
• U.S. matters are likely to dominate, with the latest labour market report due at 13:30 London.