Still Outperforming Peers Following BoE DMP

Broader weight in core global FI markets pushes gilts away from session highs.

• Futures got near initial resistance at 97.86, topping out at 97.85, before falling back to 97.70 as of typing.
• That means initial technical parameters at Tuesday’s range extremes (97.08-97.86) remain intact.
• Cash gilt yields are 6bp lower to 1bp higher, twist steepening on the day.
• Benchmarks haven’t got anywhere near challenging their May lows.
• 2s10s and 5s30s stick within recent ranges.
• SONIA futures are flat to +5.0, pulling back from best levels alongside gilts.
• A reminder that today’s cross-market outperformance for both gilts and GBP STIR markets comes on the back of a slowing in wage growth expectations in the latest DMP survey.
• That comes after the recent moves in BoE pricing lagged the dovish repricing covering the U.S. Fed.
• Gilt underperformance has also been seen against Tsys over the same horizon.
• Cross-market spill over surrounding the impending ECB decision is now eyed.