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Rallying On Spill Over From ECB Speak

GILTS

Spill over from ECB speak has underpinned gilts this morning, with expectations for a June rate cut solidifying.

  • Also note that some ECB GC centrists have kept the possibility of an April hike on the table.
  • Gilt futures +47 at 99.80, 99.49-82 range.
  • Yesterday’s range remains intact.
  • Gilt yields 2.5-5.0bp lower on the day, 5s lead the rally.
  • As flagged earlier, bulls will want to overcome 100.00 in futures and close the Feb 5 opening gap higher in 10-Year yields (3.918%).
  • SONIA futures underpinned alongside the latest rally in gilts, last flat +6.0.
  • BoE-dated OIS shows ~65bp of ’24 cuts.
  • Domestic news flow has been light, leaving cross-market flow & macro headlines at the fore.
  • That is set to continue with the UK release calendar empty ahead of the weekend.
BoE MeetingSONIA BoE-Dated OIS (%)Difference Vs. Current Effective SONIA Rate (bp)
Mar-245.200+1.2
May-245.170-1.9
Jun-245.083-10.5
Aug-244.946-24.3
Sep-244.823-36.6
Nov-244.667-52.1
Dec-244.541-64.7
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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