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Off Best Levels, Pay-side In BoE-Dated OIS Noted

GILTS

Gilts move back from best levels, with further pay-side flows in the BoE-dated OIS space helping cap morning rallies, as terminal policy rate pricing threatens 6.40%, testing the mini-Budget highs in the process. The move also comes alongside similar swings in wider core global FI markets.

  • That leaves Gilt futures -20 or so, while cash Gilts run 1-4bp cheaper as the curve bear flattens.
  • Once again, we haven't seen much in the way of meaningful headline flow, outside of some BBG source based speculation surrounding BoE Deputy Governor succession, with a lack of overt triggers re: receiving flows and limited desire/ability to warehouse any such risk probably furthering the direction of travel in the short-end.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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