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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.
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