Wider Cross-Market After Global Impulses Provide A Bid

After following the moves higher in wider core global FI markets over the U.S. data & ECB decision/post-meeting communique, gilts seem to help wider core global FI markets away from best levels of the day. We haven’t seen anything in the way of fresh headline drivers and point to the previously alluded to mix of fiscal expectations and data inputs seen in recent times (as well as their feedthrough into BoE expectations/market pricing) as a driver of cross-market widening flow.

• Gilt futures last show +15 or so at 98.29, 30 ticks off session bests printed a little under an hour ago.
• Well-defined technical parameters remain untouched, with bears failing to force a test of key support levels in the contract during the earlier sell off.
• Cash gilt yields are 1-3bp lower on the day, with 5s leading the rally and the long end lagging at the margin. 10s move back below 4.00%.
• ECB & U.S. data back-up/takeaways may also have promoted some outright/cross-market paying of BoE-dated OIS as the dust settles, although 100bp of BoE rate cuts are once again priced through ’24 vs. ~90bp earlier in the day.
• SONIA futures sit flat to +4.5 through the blues, with the earlier weakness more than reversed on the previously mentioned offshore drivers.