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Still Outperforming Peers

GILTS
Bank Of England (BOE) Market NewsHomepageBond Market NewsBulletMarketsFixed Income Bullets

Cross-market moves continue to guide gilts today, albeit with UK paper outperforming global peers owing to post-FOMC catch up.

  • Bulls failed to test initial resistance in futures (96.57), before the contract faded from best levels.
  • The pullback failed to get anywhere near yesterday’s closing levels as yesterday’s Fed decision continues to underpin.
  • Contract last +67 at 96.32.
  • Cash gilt yields last 3.0-7.5bp lower, with 5s outperforming on the curve.
  • The 2-/5-/10-Year butterfly trades further away from multi-week highs in the process.
  • SONIA futures remain underpinned as their sensitivity to U.S. matters remain elevated. Contracts last 0.25 to 13.0 higher.
  • BoE-dated OIS shows 44.5bp of ’24 cuts.
  • A reminder that UK local elections could provide the catalyst for a leadership challenge within the ruling Conservative Party if they perform poorly.
  • Final UK services PMI data is due tomorrow.
BoE MeetingSONIA BoE-Dated OIS (%)Difference Vs. Current Effective SONIA Rate (bp)
May-245.199-0.1
Jun-245.111-8.9
Aug-244.993-20.7
Sep-244.924-27.6
Nov-244.827-37.3
Dec-244.755-44.5
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Cross-market moves continue to guide gilts today, albeit with UK paper outperforming global peers owing to post-FOMC catch up.

  • Bulls failed to test initial resistance in futures (96.57), before the contract faded from best levels.
  • The pullback failed to get anywhere near yesterday’s closing levels as yesterday’s Fed decision continues to underpin.
  • Contract last +67 at 96.32.
  • Cash gilt yields last 3.0-7.5bp lower, with 5s outperforming on the curve.
  • The 2-/5-/10-Year butterfly trades further away from multi-week highs in the process.
  • SONIA futures remain underpinned as their sensitivity to U.S. matters remain elevated. Contracts last 0.25 to 13.0 higher.
  • BoE-dated OIS shows 44.5bp of ’24 cuts.
  • A reminder that UK local elections could provide the catalyst for a leadership challenge within the ruling Conservative Party if they perform poorly.
  • Final UK services PMI data is due tomorrow.
BoE MeetingSONIA BoE-Dated OIS (%)Difference Vs. Current Effective SONIA Rate (bp)
May-245.199-0.1
Jun-245.111-8.9
Aug-244.993-20.7
Sep-244.924-27.6
Nov-244.827-37.3
Dec-244.755-44.5