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GILTS: Weaker Alongside Peers & Bid In Oil, Wider Macro Events Eyed

GILTS
CEEMEABulletUKMarketsFixed Income Bullets

Gilts hold lower, with adjustments to weakness in core global FI peers and the latest uptick in crude oil futures applying pressure.

  • Light support seen around the time of the SNB’s 50bp rate cut (although guidance not particularly dovish) and ticks away from highs in oil futures was quickly sold into.
  • Futures print lowest levels of the month at 94.82 before modest recovery to 94.90.
  • Initial support at the Nov 25 low (94.66). Bears ultimately target key support at the Nov 18 low (93.40).
  • Yields 1-4.bp higher across the curve, steepening.
  • 10s last 4.355%, 16.5bp off their Dec low. The Nov 25 high at 4.388% presents the next upside area of interest there.
  • Gilt/Bund spread broke back above 220bp, although similar to yesterday’s widening episode, faded back to ~219bp.
  • SONIA futures flat to -4.0.
  • BoE-dated OIS showing 80bp of cuts through Dec ’25, a level that has proved to be a bit of an anchor in recent sessions.
  • Little of note on the UK calendar today, which will leave focus on spillover from the ECB decision and U.S. data.

BoE Meeting

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Gilts hold lower, with adjustments to weakness in core global FI peers and the latest uptick in crude oil futures applying pressure.

  • Light support seen around the time of the SNB’s 50bp rate cut (although guidance not particularly dovish) and ticks away from highs in oil futures was quickly sold into.
  • Futures print lowest levels of the month at 94.82 before modest recovery to 94.90.
  • Initial support at the Nov 25 low (94.66). Bears ultimately target key support at the Nov 18 low (93.40).
  • Yields 1-4.bp higher across the curve, steepening.
  • 10s last 4.355%, 16.5bp off their Dec low. The Nov 25 high at 4.388% presents the next upside area of interest there.
  • Gilt/Bund spread broke back above 220bp, although similar to yesterday’s widening episode, faded back to ~219bp.
  • SONIA futures flat to -4.0.
  • BoE-dated OIS showing 80bp of cuts through Dec ’25, a level that has proved to be a bit of an anchor in recent sessions.
  • Little of note on the UK calendar today, which will leave focus on spillover from the ECB decision and U.S. data.

BoE Meeting

Keep reading...Show less