July 16, 2024 09:25 GMT
Rally Extends
GILTS
A move lower in equity & crude oil futures has allowed gilts to rally.
- Gilt futures +36 at 98.64, initial resistance (98.53) breached. Bulls now look to the June 25 high (98.92), protecting key resistance at the June 21 high (99.23).
- Cash gilt yields are 3.5-5.5bp lower, bull steepening.
- 20-Year supply passed smoothly, with recent cheapening on the 10-/20-/30-Year fly helping generate solid demand metrics.
- SONIA futures extend early gains alongside gilts, last flat to +8.0.
- BoE-dated OIS shows 11.5bp of cuts for August and ~51bp of easing through year end, still off recent dovish extremes.
- Kantar supermarket price metrics showed the lowest Y/Y rise in nearly 3 years.
- UK CPI & labour market data, as well as the King’s speech, are due over the next ~48 hours.
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