Pressured By Spill Over From Tsy Weakness On NFPs

Gilts finally break out of the extremely narrow range witnessed since Tuesday, with futures through initial support at 97.08, showing as low as 96.86 on the follow.

• Next support in the contract comes in at the June 3 low (96.26), with the pullback from recent recovery highs denting bullish hopes.
• We had noted that the move was still corrective in nature on several occasions.
• Gilt yields are 6-8bp higher, with 5s leading the sell off.
• SONIA futures also pull away from recovery highs, last showing 0.5-9.5bp lower, with the late reds and early greens under the most pressure.
• BoE-dated OIS moves to price ~33.5bp of cuts through year end vs. closer to 40bp that was seen for most of the session.
• The first full cut is still priced through the end of the Nov MPC, just.
• Cross-market moves and broader headline flow is set to dictate matters into the weekend, with little local event risk to flag.