July 17, 2024 07:30 GMT
Modest Bear Flattening Following CPI, Supply & King’s Speech Due
GILTS
Gilts lower in the wake of the firmer-than-expected UK CPI data and modest hawkish repricing in GBP STIRs.
- 2s lead the move, with yields 2.5-4.5bp higher as the curve bear flattens.
- Gilt futures -3 at 98.49, back from yesterday’s late highs.
- The bullish technical theme remains in play, with a noisy CPI release doing little to alter that picture at this stage.
- Initial resistance at yesterday’s high (98.79), which protects the June 25 high (98.92).
- Initial support not seen until the July 11 low (97.63).
- A reminder that the King’s Speech will be delivered late this morning (we wrote more on that here).
- This morning will also see the DMO sell GBP4bn of the 4.125% Jul-29 gilt.
- Further out, the latest UK labour market report is due tomorrow.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference Vs. Current Effective SONIA Rate (bp) |
Aug-24 | 5.125 | -7.5 |
Sep-24 | 5.024 | -17.6 |
Nov-24 | 4.853 | -34.7 |
Dec-24 | 4.742 | -45.8 |
Feb-25 | 4.581 | -61.9 |
Mar-25 | 4.469 | -73.1 |
May-25 | 4.324 | -87.6 |
Jun-25 | 4.225 | -97.5 |
Source: MNI - Market News/Bloomberg. 2025 meeting dates are estimated.
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