Off Yesterday’s Lows

Gilts move away from yesterday’s late lows alongside wider core global Fi markets.

• Futures are +8 at 95.68.
• Cash gilt yields are 2-5bp lower on the day, bull steepening.
• Some pointed to slightly more dovish snippets from Fed’s Bostic as supportive for bonds in Asia hours.
• Spanish CPI data saw a 0.1ppt downside surprise for CPI Y/Y and a 0.1ppt upside surprised for HICP Y/Y.
• SONIA futures and BoE-dated OIS are little changed vs. pre-gilt open levels (flagged earlier).
• Yesterday’s low (95.33) presents initial technical support, with bears in control at this stage. Bulls need to overcome yesterday’s high (96.43).
• Local headline flow has seen PM Sunak suggest that a vote for the Conservatives is a vote for interest rate cuts.
• Expect political matters to dominate UK headlines up until (and after) the July 4 election.
• The UK calendar is essentially empty today, which will leave focus on headline flow and cross-market matters.