Post-Auction Rally Extends, 10s Touch 3.90%

Strong demand at today’s gilt auction has allowed the early rally to extend.

• Yields are now 6-7bp lower across the curve, with the early bull steepening that came on the back of the labour market data unwound post-auction.
• 10s print as low as 3.900% with the Feb 5 opening gap higher now closed.
• A move below 3.90% would expose the 50.0% retracement of the late Dec to late Feb move higher in 10-Year yields at 3.849% (marked off intraday highs and lows).
• Gilt futures move above the highs seen in recent sessions, last +59 at 100.20 (range 99.79-100.26).
• The short-term technical hull trend has extended.
• Bulls now look to the 1.50 projection of the Feb 29 -Mar 1- 4 price swing (100.31). Above there would expose the 1.764 projection of the same price swing (100.73)