Just Above Lows, Little Respite For Bulls

Gilt futures hover above mid-morning lows, with little in the way of relief rallies noted across core global FI markets (detailed earlier).

• Data, IG supply and a move off lows in oil/equity markets have kept bears in control since the early sell off.
• Futures -53 at 98.17 vs. lows of 98.11.
• Initial round number support at 98.00, which protects the next level of Fibonacci support.
• Yields 1.5-4.0bp higher, 10s still lead the sell off, just.
• SONIA futures flat to -4.0, also off lows.
• BoE-dated OIS little changed from levels flagged mid-morning, A 25bp cut is fully discounted through the Nov MPC, with ~38.5bp of cuts priced through year end.
• Goldman Sachs suggest that “with spillovers from the U.S. still elevated, this week brings some short-term risks for the UK” front end, as we suggested earlier.
• They go on to stress that “given that inflation is back close to target and the pivot to growth is under way, the solid activity picture has increased our confidence in a 2-cut baseline for the BoE this year.”