Rally Extends, Front End Leads

Gilt futures show as high as 97.09 before fading back to ~97.00.

• Initial resistance at the Feb 29 low (96.83) has been breached, with little in the way of meaningful technical levels seen until the April 12 high (98.23).
• Bears remain in technical control as long as the contract trades below the April 12 peak.
• Cash gilt yields are 2-5bp lower on the day as the curve bull steepens.
• Yesterday’s late comments from BoE Governor Bailey will be filtering into cash markets, as will the fall in oil and extension of yesterday’s recovery in wider core global FI markets.
• Local news flow has been limited since yesterday’s gilt futures close.
• SONIA futures show a little below pre-gilt open levels as gilt futures come back from best levels, last flat to +6.5.
• BoE’s Greene will speak again today, although we have heard from her on several occasions over the last week or so.
• That will likely leave focus on cross-market and macro matters.