Shy Of Best Levels, Albeit Comfortably Richer On The Day

Gilt futures operate ~25 ticks shy of their post-PMI highs, after rhetoric emanating from the heavily awaited Chinese Politburo meeting did enough to take the edge off the rally. Gilt futures maintain a bullish theme and the contract is trading closer to its recent highs, allowing bulls to target the Jul 19 high and the bull trigger (97.84), with the contract last +70 or so. Cash Gilts run 4-8bp richer on the day, with the belly to intermediates leading the rally.

• SONIA futures sit 1-7bp richer through the greens, flattening through that area of the curve, while operating comfortably shy of dovish session extremes. The same holds true for BoE-dated OIS, which shows ~36bp of tightening for next month’s meeting, while terminal policy rate pricing has nudged back towards 5.90% after showing below 5.85% earlier today.
• Local headline flow has been limited, outside of the PMI readings, with long-dated BoE QT sales providing the remaining point of interest on today’s local docket.