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Off Lows, Tight Ranges

GILTS
Bank Of England (BOE) Market NewsHomepageBond Market NewsBulletMarketsFixed Income Bullets

Gilts off lows. Firmer-than-expected UK GDP provided early pressure, before solid demand at the GBP3.75bn 4.00% Oct-31 gilt auction provided light support.

  • Futures stick to a tight 17-tick range, last -4 at 97.93.
  • Our technical analyst points to a short-term bearish picture despite the recent gains in the contract. Initial support at the July 4 low (97.32).
  • Yields 0.5-1.5bp higher.
  • While we don’t see today's GDP release as a meaningful market mover, we have noted overall activity data is holding up much better than consensus/BoE exp.
  • SONIA futures a little lower as result, -1.0 to -2.5.
  • Meanwhile BoE dated OIS now shows ~11.5bp of cuts for August vs. ~12.5bp late yesterday. ~45.5bp of easing priced through year end.
  • The UK calendar is empty for the rest of the day, leaving focus on U.S. CPI.
  • Further out, June’s CPI data is the next meaningful UK release, due Wednesday.
BoE MeetingSONIA BoE-Dated OIS (%)Difference Vs. Current Effective SONIA Rate (bp)
Aug-245.087-11.3
Sep-244.996-20.4
Nov-244.837-36.3
Dec-244.748-45.2
Feb-254.608-59.2
Mar-254.516-68.4
May-254.393-80.7
Jun-254.304-89.6

Source: MNI - Market News/Bloomberg. 2025 meeting dates are estimated.

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Gilts off lows. Firmer-than-expected UK GDP provided early pressure, before solid demand at the GBP3.75bn 4.00% Oct-31 gilt auction provided light support.

  • Futures stick to a tight 17-tick range, last -4 at 97.93.
  • Our technical analyst points to a short-term bearish picture despite the recent gains in the contract. Initial support at the July 4 low (97.32).
  • Yields 0.5-1.5bp higher.
  • While we don’t see today's GDP release as a meaningful market mover, we have noted overall activity data is holding up much better than consensus/BoE exp.
  • SONIA futures a little lower as result, -1.0 to -2.5.
  • Meanwhile BoE dated OIS now shows ~11.5bp of cuts for August vs. ~12.5bp late yesterday. ~45.5bp of easing priced through year end.
  • The UK calendar is empty for the rest of the day, leaving focus on U.S. CPI.
  • Further out, June’s CPI data is the next meaningful UK release, due Wednesday.
BoE MeetingSONIA BoE-Dated OIS (%)Difference Vs. Current Effective SONIA Rate (bp)
Aug-245.087-11.3
Sep-244.996-20.4
Nov-244.837-36.3
Dec-244.748-45.2
Feb-254.608-59.2
Mar-254.516-68.4
May-254.393-80.7
Jun-254.304-89.6

Source: MNI - Market News/Bloomberg. 2025 meeting dates are estimated.