June 06, 2024 12:09 GMT
Still Outperforming Peers Following BoE DMP
GILTS
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.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference Vs. Current Effective SONIA Rate (bp) |
Jun-24 | 5.200 | +0.0 |
Aug-24 | 5.114 | -8.6 |
Sep-24 | 5.036 | -16.4 |
Nov-24 | 4.905 | -29.5 |
Dec-24 | 4.820 | -38.0 |
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