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Off Initial Highs, Futures Little Changed

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

Gilt futures track swings in wider core global FI markets, initially showing through yesterday’s high before fading.

  • The contract last prints +2 at 98.60, sticking to a narrow 15-tick range thus far.
  • Fresh moves higher would target the April 10 high (99.10).
  • Cash gilt yields are 0.5-1.0bp lower.
  • SONIA futures edge off highs to last print flat to +1.5.
  • BoE-dated OIS shows ~60bp of ’24 cuts.
  • BoE MPC member Greene will speak today (12:00 London, with a slideshow released at that time).
  • We view this as the most significant BoE address of the week. The speech is entitled “The current state of Britain’s labour market.”
  • We think that Greene and Haskel remain the two most hawkish members of the MPC (we suspect Mann is slightly less hawkish based on her most recent comments).
  • Any signal that Greene sees less risk of inflation persistence would likely be deemed significant.
  • Her vote is unlikely to be needed to reach quorum to cut rates but if she did indicate that she was leaning in a more dovish direction, this would likely see the market increase the probability of near-term cuts.
  • A continuation of her hawkish stance would probably see less of a market reaction, although the recent dovish repricing gives a little more room for such an adjustment.
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Gilt futures track swings in wider core global FI markets, initially showing through yesterday’s high before fading.

  • The contract last prints +2 at 98.60, sticking to a narrow 15-tick range thus far.
  • Fresh moves higher would target the April 10 high (99.10).
  • Cash gilt yields are 0.5-1.0bp lower.
  • SONIA futures edge off highs to last print flat to +1.5.
  • BoE-dated OIS shows ~60bp of ’24 cuts.
  • BoE MPC member Greene will speak today (12:00 London, with a slideshow released at that time).
  • We view this as the most significant BoE address of the week. The speech is entitled “The current state of Britain’s labour market.”
  • We think that Greene and Haskel remain the two most hawkish members of the MPC (we suspect Mann is slightly less hawkish based on her most recent comments).
  • Any signal that Greene sees less risk of inflation persistence would likely be deemed significant.
  • Her vote is unlikely to be needed to reach quorum to cut rates but if she did indicate that she was leaning in a more dovish direction, this would likely see the market increase the probability of near-term cuts.
  • A continuation of her hawkish stance would probably see less of a market reaction, although the recent dovish repricing gives a little more room for such an adjustment.