Off Lows, Hawkish BoE Repricing Dominates, Futures Tested Key Support

Hawkish-leaning comments from BoE’s Greene combined with the extension of the hawkish global central bank repricing, weighing on gilts.

• Futures breached psychological support at 97.00, before basing around the Feb 29 low and bear trigger (lows of 96.82 registered thus far).
• The contract has recovered to ~97.15.
• Cash gilt yields are 4-7bp higher across the curve, with the belly leading the sell off.
• 5s30s flattens but remains within the range seen in recent weeks.
• BoE-dated OIS shows ~49.5bp of cuts, with ~28.5bp of cuts priced through the September MPC (the latter briefly faded blow pricing 25bp of cuts through that juncture).
• The BoE’s credit conditions survey was more resilient than many expected but wasn’t a market mover.
• The latest ECB decision and U.S. PPI reading are set to generate a lot of attention in the coming hours.
• Elsewhere, BoE’s Greene will speak at 17:30 London, covering “lessons learnt from the last economic crisis.”