New Lows For Futures, 10-Year Yields Closed Above 200-DMA

Gilt sell off in the wake of the firmer-than-expected UK wage data, with yesterday’s low in futures breached.

• Today’s data further pushes back against the idea of imminent BoE cuts, although the June and particularly August MPC meetings remain very much in play re: a first cut.
• Futures trade as low as 96.53, through the 1.50 projection of the Mar 12-15-22 price swing (96.57). Bears now target the 1.618 projection of the same move (96.30).
• Moving average studies underline the bearish technical setup in the contract.
• Cash gilt yields are 2-3bp higher across the curve.
• 2s test April yield highs, while 10s register fresh year-to-date yield highs, with the latter next eying the Nov 24 high (4.323%).
• 10s closed above their 200-DMA yesterday, representing the first such close since December.
• SONIA futures sit around pre-gilt open levels, just off lows.
• Incoming BoE Deputy Governor Lombardelli is set to appear in front of the TSC later today, while BoE Governor Bailey will speak at 18:00 London.
• Elsewhere, GBP1.5bn of 0.75% Nov-33 I/L gilt supply is due.