Rallying On Comments From BoE's Mann

Gilts rally in the wake of comments from ex-hawkish BoE dissenter Mann as she explained her reasoning for switching her vote to no change.

• Her comments around discretionary services inflation softening and expectations for slower wage growth will have driven the rally.
• Mann also noted that the market is doing the work for her, so she doesn't need to vote for a cut.
• Her comments leave her on the hawkish side of the BoE spectrum (as was generally expected), but she didn't explicitly say that rate cuts weren't appropriate here, just that markets expect too much.
• Gilt futures last +37 at 99.66 (99.27-99.70 range). Initial resistance seen at 100.05, Friday’s high.
• Cash gilt yields 3-4bp lower., light bull flattening seen.
• The presence of the upcoming GBP3.0bn auction of the 4.50% Jun-28 gilt will be factoring into the light flattening.
• SONIA futures now flat to +5.0, also firming post-Mann.
• BoE-dated OIS shows ~77bp of ’24 cuts after moving below 75bp earlier today.