Rally Extends, Bulls Push Futures Closer To Resistance

Little market-reaction to the Bernanke report, which was largely in line with expectations.

• To recap, the report suggested that the BoE should stop using fan charts and guided towards the idea of publishing a projected rate path.
• Gilt futures have followed global peers higher, recouping some of the losses lodged earlier in the week.
• Still, the contact remains below 98.00, with that psychological level protecting resistance at the Mar 15 low (98.05).
• Cash gilt yields are 4.5-6.5bp lower across the curve, with the 5- to 10-Year zone now leading the rally.
• SONIA futures are flat to +8.5, at session highs.
• BoE-dated OIS also extends on early moves to price ~54bp of ’24 cuts.
• Geopolitical risk remains at the fore into the weekend, with worry re: a potential Iranian attack on Israel remaining evident.
• Elsewhere, U.S. data and Fedspeak will be eyed over the next few hours.
• Further out, UK monthly CPI (Wednesday) and labour market (Tuesday) data is due next week, along with retail sales (Friday). That will be complemented by a raft of BoE speak.