U.S. Data Stops ECB-Driven Bid From Developing Further

Gilts get caught between the bullish reaction in EGBs post-ECB and the bearish move in Tsys in the wake of U.S. data.

• That prevents a move above 96.00 from going too far, with the contract retreating to ~95.95 at typing, +50 or so on the day.
• Cash gilts run 3-6bp richer on the day, with 5s outperforming as the broader curve steepens.
• SONIA futures last sit flat to 10bp richer, with the late greens and blues leading the strip higher.
• Spill over from the ‘dovish hike’ seen at the ECB decision tilts the BoE-dated OIS strip flatter, with ~19.5bp of tightening showing for this month’s meeting, while terminal policy rate pricing ticks closer to 5.60% after showing around 5.65% earlier today.