Off Lows, BoE Talks Dominate

Gilt futures have stuck to a narrow, sub-40 tick range today, with the early rally respecting yesterday’s high. That leaves bears in overall technical control, although the recent rally in the space has increased the bullish risk.

• The contract last trades a little above mid-range at 97.93, while cash gilt yields are little changed to 1.5bp higher, as 10s lead the sell off.
• The space has managed to shake off much of the weakness that came on the back of relatively soft demand at this morning’s long end green gilt supply and spill over weakness from peers.
• That allows gilts to outperform most global peers across much of the curve.
• Tomorrow’s BoE decision continues to dominate discussions.
• Yesterday’s price action and OI data points to fresh longs being added in gilt futures.