Off Highs, Still A Little Firmer On The Day

Spill over from block buying in the belly of the U.S. Tsy futures curve and continued adjustments to the French election outcome pushed gilt futures through initial resistance at 98.24. That move then faded, with futures back to ~98.20 at typing.

• Fresh upside would solidify the recent bullish recovery and turn focus to the 1.236 projection of the May 29-Jun 4-10 swing (99.25).
• Cash gilt yields 1-2bp lower across the curve.
• The pre-event text release from BoE’s Haskel stuck to the hawkish end of the spectrum but had little lasting impact as he is set to depart at the end of August.
• Watch for the Q&A after his 17:15 address.
• Elsewhere, Chancellor Reeves set a downbeat tone for the outlook for UK finances. Markets continue to take a positive view on Labour. Potential CGT tweaks still generate the most interest from a fiscal perspective.
• Labour attempted to placate CGT worries in the run up to the election, pointing to a want to remove wages substitution in the private equity industry in a bid to generate a fairer tax structure, while seemingly welcoming those that had “skin in the game.”