Recovery From Lows Extends, Front End Leads

Little to really flag when it comes to headline drivers, as gilt futures initially pull back before trading to fresh session highs.

• A similar move has also been seen in wider core global FI markets.
• The contract now trades +20 on the day at 97.81, well-defined technical parameters remain untouched, with the bearish backdrop still intact.
• The front end of the curve leads the bid, with benchmark yields running 0.5-6.0bp lower.
• Short end participants couldn’t force a sustainable move when it came to pricing in less than 60bp of ’24 cuts, with recent extremes essentially respected. ~68bp of ’24 cuts are priced once again, which may explain some of the broader move in UK fixed income.
• SONIA futures are -0.5 to +3.0 through the blues, with earlier losses more than reversed in most instances.