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Off Highs, Curve A Little Flatter, BoE Sales Due Later

GILTS
Bank Of England (BOE) Market NewsHomepageBond Market NewsBulletMarketsFixed Income Bullets

Gilt futures little changed at 98.56, sticking within Friday’s range. Technicals are bullish, resistance 99.25, support 98.21. Yields, 0.5-2.0bp lower across the curve, flattening seen. Morgan Stanley recommended 10s30s flatteners late Friday.

  • Softer-than-expected German IFO saw session highs, before the rally was pared.
  • BoE-dated OIS little changed, 47.5bp of ’24 cuts priced, 14.5bp through Aug, ~22bp through Sep. SONIA futures +0.5 to -1.5. STIRs off last week’s dovish extremes.
  • This BoE will sell GBP750mn of medium-term gilts from its APF this afternoon, after confirming that it will trim medium- and long-term gilt sales in Q3 (the latter likely provides light support for gilts early today). CBI trends data is also due.
BoE MeetingSONIA BoE-Dated OIS (%)Difference Vs. Current Effective SONIA Rate (bp)
Aug-245.056-14.4
Sep-244.982-21.8
Nov-244.826-37.4
Dec-244.724-47.6
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Gilt futures little changed at 98.56, sticking within Friday’s range. Technicals are bullish, resistance 99.25, support 98.21. Yields, 0.5-2.0bp lower across the curve, flattening seen. Morgan Stanley recommended 10s30s flatteners late Friday.

  • Softer-than-expected German IFO saw session highs, before the rally was pared.
  • BoE-dated OIS little changed, 47.5bp of ’24 cuts priced, 14.5bp through Aug, ~22bp through Sep. SONIA futures +0.5 to -1.5. STIRs off last week’s dovish extremes.
  • This BoE will sell GBP750mn of medium-term gilts from its APF this afternoon, after confirming that it will trim medium- and long-term gilt sales in Q3 (the latter likely provides light support for gilts early today). CBI trends data is also due.
BoE MeetingSONIA BoE-Dated OIS (%)Difference Vs. Current Effective SONIA Rate (bp)
Aug-245.056-14.4
Sep-244.982-21.8
Nov-244.826-37.4
Dec-244.724-47.6