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Regaining Some Poise Alongside Tsys, Bears Do Not Test 4.00% In 10s

GILTS

Gilts have found a base, at least for now.

  • A similar move in U.S. Tsys has provided some support, as has the hold of 4.0% in 10-Year gilt yields (high of 3.992% yesterday).
  • As we noted earlier, 10s have not printed above 4.00% since the 11 December (12 December saw softer than expected UK wage data pre-gilt open, which impacted the space). The benchmark trades at ~3.94% last, ~5bp off yesterday’s high.
  • Gilt futures are +27 at 98.60, 10 ticks off the top of their 57-tick range. Technical support is tiered in from 98.00 (which represents yesterday’s low), with bears in control for now. Bulls need to retake the Jan 16 low (99.71) to start turning the technical tide more in their favour.
  • SONIA futures are -0.25 to +3.5 through the blues, with the reds outperforming.
  • BoE-dated OIS shows ~6.5bp more easing through ’24 vs. yesterday’s CPI-inspired pullback extremes, with ~108bp of cuts currently priced for this year.
  • The latest BoE credit conditions survey wasn’t a market mover.
  • The domestic docket is essentially empty for the remainder of the day.
BoE MeetingSONIA BoE-Dated OIS (%)Difference Vs. Current Effective SONIA Rate (bp)
Feb-245.201+1.3
Mar-245.172-1.6
May-245.053-13.5
Jun-244.884-30.4
Aug-244.659-52.9
Sep-244.475-71.3
Nov-244.265-92.4
Dec-244.106-108.2
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
HomepageBond Market NewsBank Of England (BOE) Market NewsBulletMarketsFixed Income Bullets
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
HomepageBond Market NewsBank Of England (BOE) Market NewsBulletMarketsFixed Income Bullets

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