Under Pressure At The Open

Gilts futures -37 at 99.59, through yesterday’s low.

• The contract is ~190 ticks off Monday’s high owing to the recovery from lows in equity markets.
• The technical picture in the contract is still bullish, with bears unable to test support at the June 21 high (99.23), at least for now.
• Initial resistance is seen at the Aug 4 high (101.46).
• Yields little changed to 3bp higher across the curve, bear steepening.
• SONIA futures now +0.25 to -4.5, under pressure alongside gilts.
• BoE-dated OIS shows ~44bp of cuts through year end.
• The NIESR has suggested that the BoE’s policy rate will follow a higher path than current market expectations, with the thinktank looking for firmer inflation vs. Bank forecasts.
• The local data calendar is limited until next week’s labour market and inflation readings, leaving wider market sentiment at the fore.
• On the supply front, the DMO will come to market with GBP4bn of 4.125% Jul-29 gilt supply today.