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Pressured By German Regional CPI Releases

GILTS

Gilt futures move to fresh session lows on the back of the initial German state CPI readings.

  • The CPI run rate from the German regions that we have seen point to headline national CPI readings that are in line with the BBG consensus.
  • However, upside risks to the core national readings are noted, explaining the sell off in bonds.
  • Futures -31 at 97.25 (range 97.22-83).
  • Cash gilt yields are 3-4bp higher across the curve.
  • SONIA futures are +0.25 to -4.0 through the blues.
  • BoE-dated OIS removes some rate cut premium, last showing 57bp of cuts through ’24, testing recent extremes.
  • This move seems purely driven by external factors, with UK money supply and lending data having no impact.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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