Little Changed To Start

Gilt futures see light pressure to start the week before recovering to near flat.

• Bears do not force a test of Friday’s low in futures (97.05), operating in a 97.16-33 range thus far.
• That leaves well-defined technical parameters in play for the contract and the bearish threat intact.
• Meaningful support comes in at the Feb 13 low/bear trigger (96.81).
• Cash gilt yields sit within 1bp of Friday’s closing levels.
• SONIA futures are flat to -3.5 through the blues, off session lows.
• Late Friday comments from BoE chief economist Pill were not a meaningful needle mover.
• He showed continued focus on the need to reduce inflation (needing to see several more months of data and a further easing of wage pressures), although did note that "rates can be cut while leaving policy restrictive."
• Note that former BoE chief economist Haldane has warned that the BoE risks deepening the UK’s recession, as he pointed to a need to loosen policy.
• Elsewhere, the latest Rightmove house price index data revealed a second consecutive M/M increase.
• BoE APF sales from the medium maturity bucket headline a thin local docket on Monday.