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Tracking Peers Higher

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

Gilts follow core global peers higher at the open, with an eye on Chinese stimulus expectations.

  • Futures look through yesterday’s best levels at typing, printing as high as 97.92.
  • The contract is in consolidation mode and trading just below its recent high. The latest pause appears to be a bull flag formation.
  • A break of resistance at the May 10 high (98.29) would confirm the flag and highlight a resumption of the recovery that started Apr 25, opening 98.46, a Fibonacci retracement.
  • On the downside, a stronger reversal lower would refocus attention on 95.36, the Apr 24 low and bear trigger.
  • Cash gilt yields are ~4bp lower across the curve.
  • SONIA futures operate around pre-gilt open levels, last flat to +2.5, with BoE-dated OIS still showing ~55bp of ’24 cuts and 50/50 odds of a 25bp cut at the June MPC.
  • Former Fed Chair Bernanke will testify in front of the TSC later today, in light of his review of Bank of England forecasting methods. That shouldn’t be a market mover.
  • Elsewhere, the DMO will return to market with GBP3.0bln of the 0.875% Jul-33 green gilt.
  • There is little else of note on the UK calendar, which should leave focus pinned on the U.S. CPI release.
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Gilts follow core global peers higher at the open, with an eye on Chinese stimulus expectations.

  • Futures look through yesterday’s best levels at typing, printing as high as 97.92.
  • The contract is in consolidation mode and trading just below its recent high. The latest pause appears to be a bull flag formation.
  • A break of resistance at the May 10 high (98.29) would confirm the flag and highlight a resumption of the recovery that started Apr 25, opening 98.46, a Fibonacci retracement.
  • On the downside, a stronger reversal lower would refocus attention on 95.36, the Apr 24 low and bear trigger.
  • Cash gilt yields are ~4bp lower across the curve.
  • SONIA futures operate around pre-gilt open levels, last flat to +2.5, with BoE-dated OIS still showing ~55bp of ’24 cuts and 50/50 odds of a 25bp cut at the June MPC.
  • Former Fed Chair Bernanke will testify in front of the TSC later today, in light of his review of Bank of England forecasting methods. That shouldn’t be a market mover.
  • Elsewhere, the DMO will return to market with GBP3.0bln of the 0.875% Jul-33 green gilt.
  • There is little else of note on the UK calendar, which should leave focus pinned on the U.S. CPI release.