Off Lows, Early Cross-Market Outperformance Vs. Core Peers Intact

Gilts move higher alongside global peers, although the move stalls a little as crude oil prices find a base.

• Gilt futures reach new session highs of 97.16, but a familiar bearish picture remains intact for that contract and initial key technical parameters are still some distance away.
• Friday’s high has been breached, but Thursday’s high is unchallenged.
• Cash gilt yields are flat to 5bp lower on the day, bull steepening.
• Gilts continue to outperform core global peers across the curve on the rally away from session lows, with feedthrough from Friday’s dovish offering from BoE Deputy Governor Ramsden seemingly driving tightening vs. Bunds and Tsys.
• A steady cover ratio for the BoE’s short-dated APF sales does little for the front end of the curve.
• BoE-dated OIS sees a dovish extension of the early move, showing ~58bp of ’24 cuts.
• SONIA futures are mostly through early highs, last flat to +8.0 through the blues, with the reds outperforming.