Free Trial

Off Early Highs, But Comfortably Firmer On Day


Gilt futures are shy of early bests, with the AHE-driven rally running out of steam alongside a pullback from best levels in Bunds.

  • The latest 5-Year gilt auction saw an extension of the recent trend of generally sub-par demand, which wouldn’t have aided bulls.
  • Futures last print +95, a little above 98.45. That leaves the contract ~30 ticks shy of the top of its ~50 tick range. Friday’s opening gap lower in the contract was closed during the early rally.
  • An extension of the early rally would leave bulls looking to the Dec 6 high (98.97).
  • Gilts yields run 7.5-9.5bp lower on the day, with the wings still lagging.
  • 10-Year yields found a base around 3.95% before retracing to ~3.97%. Last week’s low at 3.941% (98.84 in futures today) and 3.90% (99.22 in futures today) present the immediate reference points on that front.
  • SONIA futures last +0.5 to +12.0.
  • BoE-dated OIS is little changed to 11bp softer through ’24 MPC contracts. ~23.5bp of cuts are now priced through the June ’24 MPC. ~85bp of cuts are seen through ’24 on the whole.
  • STIRs are off dovish session extremes given the limited pullback in gilts.
  • There isn’t much in the way of local event risk to flag for the remainder of today, with broader macro focus set to fall on U.S. CPI data.
  • Tomorrow’s monthly economic activity data presents the next domestic point of note but that shouldn’t be a gamechanger for Thursday’s BoE decision.
MNI London Bureau | +44 0203-865-3809 |

To read the full story



MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.