Under Pressure, Long End Leads Sell Off

The move away from session highs gains more traction.

• We don’t see an overt driver, with talk of pre-U.S. CPI long trimming and IG supply-related weakness evident.
• Countering that, we have already highlighted that EGBs have seemingly led the most recent leg of the sell off.
• Futures now -10 at 99.45, with the opening gap higher closed (range 99.37-99.99).
• Cash gilt yields are 1.0-3.5bp higher across the curve, long end under the most pressure.
• Familiar technical levels remain in play in futures. Lows of recent sessions present intermediate support ahead of the Mar 5 low (98.33).
• Bulls failed to breach 100.00 In futures/close the 5 Feb opening gap higher in 10s during the early rally.
• Latest BoE short-dated gilt sales see decent enough demand, which may be helping stabilise gilts (at least marginally).