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The recent round of Tsy weakness, likely a reaction of NY to post-French election moves, sees gilts trade lower.
- Futures printed as low as 96.94, before recovering to ~97.00.
- Next support seen at the Jun 12 low (96.84), after this morning’s break of trendline support and Friday’s low.
- Cash gilt yields are 0.5-8.0bp higher on the day, following the broader steepening theme seen in core global FI markets.
- The presence of GBP650mn of long dated APF sales from the BoE may also be helping (results due shortly).
- 2s10s is on track to close above 0bp for the first time since May ’23.
- SONIA futures are +0.25 to -6.5 at/just off session lows.
- BoE-dated OIS still shows greater than even odds of a 25bp cut in August (~13.5bp), with ~42bp of cuts priced through year end. BoE-dated OIS contracts are little changed to ~3bp firmer on the day.
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.