Off Lows, Ranges Still Tight

As noted earlier, gilts have stuck to relatively tight ranges.

• Initial weakness came from feedthrough surrounding broader core global FI markets.
• Modest downticks in both equity futures and crude oil provided some brief counter, but those impulses have faded.
• Futures last +1 at 97.92, in a 97.69-93 range.
• Cash gilt yields sit 1-2bp higher with the curve bear flattening at the margin.
• Major technical parameters remain untouched, with bulls not able to push futures too far above 98.00 yesterday and 10-Year yields operating above 4.00%.
• The GBP4bn round of 4.50% Jun-28 gilt supply saw average demand, as covered earlier, but the smooth enough passage and removal of related hedging pressure has helped bulls.
• SONIA futures are flat to -2.5 through the blues.
• BoE-dated OIS shows ~73bp of cuts for ’24, with little willingness to push meaningfully beyond pricing 75bp of cuts at present.
• Softer XpertHR wage data and fiscal speculation dominate local headline flow, but neither have had a meaningful impact.
• Looking ahead, the MNI event with BoE dove Dhingra highlights the domestic docket today, with lower tier data (CBI trends) also due.