/MNI ANALYSIS: Gilts Poised For Downside: ...>

GILTS: /MNI ANALYSIS: Gilts Poised For Downside:   With the March 29 Brexit

deadline under 37 days away and another crunch Parliamentary vote set for next

week, Gilt prices remain elevated. However, the technical outlook, positioning

and sentiment suggest potential near-term downside for Gilt futures.

* For charts see: https://emedia.marketnews.com/Feb21-2019-GiltsDownside.jpg *

- Technicals: Gilt futures are set up nicely for a bearish reversal (Fig.1).

- While global conditions are helping boost Gilts, Brexit is the main driver.

And it is clear that markets are far from poised for a near-term breakthrough. 

- Markets and oddsmakers are sceptical of Parliament passing a/the Withdrawal

Agreement by the deadline: Betfair puts just 33% probability of a bill to be

passed before March 30, and just 5% probability it will happen by end-Feb.

- Gilt futures stand out as having the longest structural positions among

instruments tracked by MNI's Europe Positioning Indicator (Figs. 2+3).

- Despite Gilt longs being reduced in three of the past four sessions,

structural longs have not been this stretched to the upside for at least the

past 12 months. This suggests there is plenty of room for longs to unwind.