Recovery In Futures Stalls Ahead Of Yesterday's High

The recovery in gilt futures stops shy of yesterday’s highs, leaving initial resistance intact (yesterday’s high at 98.08 protects the April 12 high at 98.23).

• The contract last prints -15 at 97.85 (range 97.75-98.06).
• Cash gilt yields are 0.5-1.5 bp higher, light bear flattening seen on the curve.
• A relatively soft 30-year green gilt auction and failure to break through yesterday’s high in futures seems to promote some weakness in recent trade.
• More broadly, BoE matters continue to dominate discussions.
• Our full preview of that event can be found here.
• In terms of setup for the event, spill over from Fed pricing has allowed GBP STIRs to retrace from hawkish extremes in recent sessions.
• In the long end, our FI Pi publication suggests that structural positioning in futures remains flat, consolidating after much of February and March were spent in "long" territory. Last week's trade was indicative of short cover on net.
• SONIA futures are little changed to -1.5 on the day, while BoE-dated OIS shows ~53.5bp of cuts through year end.