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Off Lows, Curve Twist Steepens


The bond supportive factors that we have outlined elsewhere promoted a bounce from session lows in gilts.

  • Bears couldn’t test technical support levels flagged elsewhere, with the contract last showing flat around the 96.70 area. Yesterday’s low was not breached early on.
  • Cash gilt yields are 3bp lower to 1bp higher, twist steepening.
  • The cross-market widening impulse for gilts has moderated from session extremes but is still evident in the 10+-Year zone (in terms of net change on the day).
  • Spill over from a dovish repricing on the ECB-dated OIS stirp is aiding the front end.
  • SONIA futures are flat to 3.5bp firmer across the curve, while BoE-dated OIS is flat to 2.5bp softer on the day.
  • Final UK manufacturing PMI data was a touch firmer than flash (but still contractionary), while Nationwide house price data wasn’t quite as soft as expected (there was a modest M/M uptick).
MNI London Bureau | +44 0203-865-3809 |

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