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Pressured By Weakness In Bunds

GILTS

Gilts follow Bunds lower after the first round of the French legislative elections.

  • Futures print 97.23, the lowest level seen since June 12.
  • Bears breach support at the trendline drawn from the May 29 low & the Jun 28 low (97.60/54).
  • This increases the bearish threat, with now bears eying the June 12 low (96.84) on any extension lower.
  • Cash gilt yields are 3-4bp higher across the curve, comfortably within multi-month ranges.
  • GBP STIRs sit around levels flagged ahead of the gilt open.
  • Final manufacturing PMI headlines the domestic calendar today, with lending and money supply data also due.
  • GBP650mn of long-dated BoE APF gilt sales are due this afternoon.
  • Looking further ahead, Wednesday will see the final services PMI reading, while Thursday will bring the release of the BoE’s latest DMP survey.
  • The general election will be held on Thursday and we should have a good indication of the outcome early on Friday morning. Given the picture provided by opinion polls, focus is set to fall on the scale of the likely Labour majority.
  • Expect our political risk team’s full preview of that event in the coming days.
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Gilts follow Bunds lower after the first round of the French legislative elections.

  • Futures print 97.23, the lowest level seen since June 12.
  • Bears breach support at the trendline drawn from the May 29 low & the Jun 28 low (97.60/54).
  • This increases the bearish threat, with now bears eying the June 12 low (96.84) on any extension lower.
  • Cash gilt yields are 3-4bp higher across the curve, comfortably within multi-month ranges.
  • GBP STIRs sit around levels flagged ahead of the gilt open.
  • Final manufacturing PMI headlines the domestic calendar today, with lending and money supply data also due.
  • GBP650mn of long-dated BoE APF gilt sales are due this afternoon.
  • Looking further ahead, Wednesday will see the final services PMI reading, while Thursday will bring the release of the BoE’s latest DMP survey.
  • The general election will be held on Thursday and we should have a good indication of the outcome early on Friday morning. Given the picture provided by opinion polls, focus is set to fall on the scale of the likely Labour majority.
  • Expect our political risk team’s full preview of that event in the coming days.