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Two-Way Flows Before Fresh Firming

GILTS

Gilts oscillate in the time since our previous update, initially capped by a brief stabilisation in equities, before fresh pressure in the equity space (FTSE futures moving to fresh session lows) and a post-IFO bid in Bunds provided support. That allowed Gilt futures to move to fresh session highs, well within the recently observed range in the contract, last +20 or so. Cash Gilts are 2-5bp richer, with the early bull steepening impulse still in play.

  • BoE-dated OIS continues to price a terminal rate that is ~125bp above prevailing levels.
  • Local headline flow has been limited, outside of the previously covered weekend comments from PM Sunak & Chancellor Hunt, who touched on well-documented inflation-related matters.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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