Rally Extends Further On Broader Risk-Off Trade

Futures take out yesterday’s high and breach resistance at 100.58, before easing back to the 100.50 area. Spill over from broader risk-off trade dominates.

• A fresh extension higher would target psychological resistance at 101.00.
• Cash gilt yields are 3-7bp lower, bull steepening.
• All benchmark yields have broken yesterday’s lows.
• 10s last ~3.84%, with the Feb low (3.726%) presenting the next major point of interest.
• 2s10s and 5s30s both trade a little below year-to-date highs.
• SONIA futures are generally off session highs, last +0.25 to +8.0.
• A reminder that BoE Governor Bailey cautioned against the idea of back-to-back rate cuts on Thursday, while chief economist Pill (a hawkish dissenter) stressed that the Bank has not committed to further easing.
• Looking ahead, Pill will speak again today (12:15 London).
• Meanwhile, broader focus will fall on U.S. NFPs and wider cross-market moves.