Short-Lived Rally Alongside Tsys, Key Technical Levels Remain Untouched

Data- & refunding-driven cues from U.S. Tsys provided a fresh, brief bid for gilts, but futures remain shy of early morning highs and cash 10s once again failed to hold below 4.00%.

• Gilt yields are 2.5-5.0bp lower, front end continues to outperform. Early session yield lows are untested across the curve.
• Initial bullish focus falls on the June 21 high in futures (99.23) & April base in 10-Year yields (3.978%)
• 2s10s sits just over 4bp off the June 26 year-to-date high, while 5s30s is less than 0.5bp off its July 29 multi-month high.
• SONIA futures and BoE-dated OIS also hold off the early dovish extremes.
• The former runs 0.5-6.0 firmer on the day, while the latter shows 14bp of cuts for tomorrow’s meeting and ~54.5bp of easing through year end.