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GILTS: Opening Rally Fades Alongside Tsys

GILTS
CEEMEABulletUKMarketsFixed Income Bullets

Gilts initially open higher before the recent downtick in Tsys makes itself felt.

  • Futures trade as high as 92.84 before easing back to ~92.55.
  • Bullish corrective cycle within a longer-term bearish technical trend remains intact.
  • Last week’s high was pierced on the open, next meaningful resistance above at the Dec 30 high 93.09.
  • Initial support at the Jan 24 low (91.52).
  • Yields flat to 2bp higher, curve a touch steeper.
  • UK paper happy to maintain higher beta to Tsys than EGBs, given recent trends and perceptions surrounding higher odds of fresh U.S. tariffs being imposed on the EU vs. the UK.
  • 10-Year Gilt/Bund spread ~4bp wider at 211.5bp.
  • Trump-driven tariff headlines dominate, see previous bullets for greater colour there.
  • GBP STIRs roughly in line with levels we flagged ahead of the gilt open.
  • Widespread consensus looks for a 25bp cut at this week’s BoE decision, which should leave focus on the forward-looking elements.
  • We look for cuts this week and in May.
  • Expect our full preview to be released tomorrow
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Gilts initially open higher before the recent downtick in Tsys makes itself felt.

  • Futures trade as high as 92.84 before easing back to ~92.55.
  • Bullish corrective cycle within a longer-term bearish technical trend remains intact.
  • Last week’s high was pierced on the open, next meaningful resistance above at the Dec 30 high 93.09.
  • Initial support at the Jan 24 low (91.52).
  • Yields flat to 2bp higher, curve a touch steeper.
  • UK paper happy to maintain higher beta to Tsys than EGBs, given recent trends and perceptions surrounding higher odds of fresh U.S. tariffs being imposed on the EU vs. the UK.
  • 10-Year Gilt/Bund spread ~4bp wider at 211.5bp.
  • Trump-driven tariff headlines dominate, see previous bullets for greater colour there.
  • GBP STIRs roughly in line with levels we flagged ahead of the gilt open.
  • Widespread consensus looks for a 25bp cut at this week’s BoE decision, which should leave focus on the forward-looking elements.
  • We look for cuts this week and in May.
  • Expect our full preview to be released tomorrow