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GILTS: Lower As Bunds Soften

GILTS
CEEMEABulletUKMarketsFixed Income Bullets

Cues from EGBs (spreads to Bunds tighter) and the bid in European equities weighs on gilts this morning.

  • Futures through the base of yesterday’s range but the move is still quite limited, lows of 95.58 registered in recent trade.
  • A bullish corrective cycle remains in play in the contract and recent gains reinforce the short-term condition.
  • Initial support and resistance derived from range extremes seen over the past couple of session, 95.49/96.18.
  • Yields 1.0-2.5bp higher, curve a touch flatter.
  • 2s10s trades either side of 0bp, around the middle of the ~17bp range witnessed over the last 2 months or so.
  • 5s30s in the middle of their multi-month range, last ~65bp.
  • Weakness in bonds filters into STIRs.
  • SONIA futures flat to -3.0.
  • BoE-dated OIS flat to 4bp less dovish on the day, showing 20bp of cuts through February, 27bp through March and 75bp through December.
  • Dovish BoE dissenter Dhingra will appear on Bloomberg TV at 10:40 London.
  • Her dovish views are well-documented, and we don’t expect a meaningful change in tone in this appearance.
  • Further out, this afternoon’s U.S. NFP release dominates the macro calendar.

BoE Meeting

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Cues from EGBs (spreads to Bunds tighter) and the bid in European equities weighs on gilts this morning.

  • Futures through the base of yesterday’s range but the move is still quite limited, lows of 95.58 registered in recent trade.
  • A bullish corrective cycle remains in play in the contract and recent gains reinforce the short-term condition.
  • Initial support and resistance derived from range extremes seen over the past couple of session, 95.49/96.18.
  • Yields 1.0-2.5bp higher, curve a touch flatter.
  • 2s10s trades either side of 0bp, around the middle of the ~17bp range witnessed over the last 2 months or so.
  • 5s30s in the middle of their multi-month range, last ~65bp.
  • Weakness in bonds filters into STIRs.
  • SONIA futures flat to -3.0.
  • BoE-dated OIS flat to 4bp less dovish on the day, showing 20bp of cuts through February, 27bp through March and 75bp through December.
  • Dovish BoE dissenter Dhingra will appear on Bloomberg TV at 10:40 London.
  • Her dovish views are well-documented, and we don’t expect a meaningful change in tone in this appearance.
  • Further out, this afternoon’s U.S. NFP release dominates the macro calendar.

BoE Meeting

Keep reading...Show less