Remaining Underpinned, Futures Still Short Of First Resistance

As noted elsewhere, gilts continue to trade on the front foot alongside wider core global FI markets.

• Futures have breached Friday’s best levels to trade as high as 99.39, but bulls still haven’t managed to force a test of initial technical resistance at the Jan 16 low/gap target (99.71).
• Cash gilt yields have fallen by 3-7bp on the day, with the curve bull flattening.
• The presence of the impending long end gilt syndication (we have flagged tomorrow as the likely day for that deal) has done little when it comes to promoting concession in the longer end of the curve.
• SONIA futures are flat to +5.0 through the blues, with the rally in gilts aiding the bid there.
• BoE-dated OIS has been subjected to some fairly limited (by recent standards) receiver-side moves alongside the rally in gilts/core global bonds, with contracts through ’24 running flat to 5bp lower on the day. ~110bp of cuts are now priced through ’24 vs. ~104.5bp heading into the gilt open earlier today.
• Local headline flow has been light since the open.
• Most of the focus has fallen on the latest Cornwall Insight estimates, which point to the Ofgem energy price cap falling by 16% in April.
• Weekend news flow centred on fiscal headroom for Chancellor Hunt (with expectations building re: tax cuts/fiscal easing in the Budget), in addition to continued pre-election political posturing.
• Wednesday's flash PMI releases present the headline round of domestic economic data this week, with public finance data due tomorrow.