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Rally Extends On Broader Risk-Off Trade

GILTS
Bank Of England (BOE) Market NewsHomepageBond Market NewsBulletMarketsFixed Income Bullets

Gilt futures rally above 101.00 on the broader risk-off price action seen since Friday’s close. Contract prints as high as 101.11 before fading back to 100.90.

  • Resistance seen at the 2.00 projection of the May 29- Jun 4-10 price swing (101.18).
  • Yields are 1.5-6.5bp lower across the curve, recent bull steepening extends.
  • Bulls eye 3.50% in 2s, 4bp below prevailing levels.
  • 10s are below 3.80%, the Feb low (3.726%) presents the next point of interest.
  • 2s10s hits fresh ’24 highs, 5s30s capped ahead of January peak.
  • SONIA futures also comfortably off highs, last 0.5 to 14.5 firmer on the day.
  • Final UK services PMI data is due today but expect the broader market tone to dominate.
  • Weekend news flow saw continued speculation surrounding a potential increase in government borrowing.
  • Some suggest that Chancellor Reeves will alter the debt measure that the fiscal rules are governed by, owing to the pressure derived from losses on BoE bond holdings.
  • Note that Reeves starts a three-day trip to the U.S. & Canada today, as she looks to sell the UK as “a stable place to do business”
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Gilt futures rally above 101.00 on the broader risk-off price action seen since Friday’s close. Contract prints as high as 101.11 before fading back to 100.90.

  • Resistance seen at the 2.00 projection of the May 29- Jun 4-10 price swing (101.18).
  • Yields are 1.5-6.5bp lower across the curve, recent bull steepening extends.
  • Bulls eye 3.50% in 2s, 4bp below prevailing levels.
  • 10s are below 3.80%, the Feb low (3.726%) presents the next point of interest.
  • 2s10s hits fresh ’24 highs, 5s30s capped ahead of January peak.
  • SONIA futures also comfortably off highs, last 0.5 to 14.5 firmer on the day.
  • Final UK services PMI data is due today but expect the broader market tone to dominate.
  • Weekend news flow saw continued speculation surrounding a potential increase in government borrowing.
  • Some suggest that Chancellor Reeves will alter the debt measure that the fiscal rules are governed by, owing to the pressure derived from losses on BoE bond holdings.
  • Note that Reeves starts a three-day trip to the U.S. & Canada today, as she looks to sell the UK as “a stable place to do business”