Moving To Bear Flattening As Technical Levels Hold And Oil Bounces

The failure to take out key technical levels in 10-Year Gilt, Bund & U.S. Tsy metrics, coupled with the bid in oil, helps gilts further away from best levels, with futures moving to fresh session lows. The contract last shows -5 or so, just above 110.10, with previously outlined technical parameters remaining in play.

• Yields across the curve now sit 2.5-5.0bp higher on the day, with the bull flattening that was seen during the London morning turning into bear flattening (the BoE’s Q124 APF sale plan continues to make its presence felt when it comes to curve moves).
• SONIA futures are flat to 4.0bp lower on the day, given the move in the global long ends.
• BoE-dated OIS runs little changed to 3bp firmer on the day, also moving away from dovish session extremes alongside core global FI, although net movements on the day do not tell a meaningfully different story to Friday’s closing markers.
• BoE Deputy Governor Broadbent failed to move the needle earlier in the day.