July 01, 2024 13:42 GMT
Weaker Again
GILTS
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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