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GILTS: Yesterday's Gap Lower Closed

GILTS
CEEMEABulletUKMarketsFixed Income Bullets

Spill over from the softer-than-expected U.S. PCE data and subsequent rally in Tsys pushes gilt futures through initial resistance at yesterday’s high (92.84), closing yesterday’s opening gap lower. Contract last 92.88.

  • Next resistance at Wednesday’s high (93.38), with the bearish technical theme remaining intact.
  • Yields 4-6bp lower, curve steepens. 2s10s and 5s30s on for highest closes since August, albeit back from session highs.
  • 10s last 4.53%, ~12bp off yesterday’s ’24 peak.
  • Outperformance vs. Bunds now sees 3bp of tightening on the day, with the spread back below 225bp. That compares to Wednesday’s multi-decade closing high at 231.3bp.
  • SONIA futures extend higher alongside the bid in the long end, last +0.5 to +9.0.
  • BoE-dated OIS now prices ~62.5bp of cuts through ’25 vs. ~60bp mid-morning.
  • The BoE will announce its Q125 APF schedule at 16:30. We will provide greater colour on that ahead of the release. 

BoE Meeting

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Spill over from the softer-than-expected U.S. PCE data and subsequent rally in Tsys pushes gilt futures through initial resistance at yesterday’s high (92.84), closing yesterday’s opening gap lower. Contract last 92.88.

  • Next resistance at Wednesday’s high (93.38), with the bearish technical theme remaining intact.
  • Yields 4-6bp lower, curve steepens. 2s10s and 5s30s on for highest closes since August, albeit back from session highs.
  • 10s last 4.53%, ~12bp off yesterday’s ’24 peak.
  • Outperformance vs. Bunds now sees 3bp of tightening on the day, with the spread back below 225bp. That compares to Wednesday’s multi-decade closing high at 231.3bp.
  • SONIA futures extend higher alongside the bid in the long end, last +0.5 to +9.0.
  • BoE-dated OIS now prices ~62.5bp of cuts through ’25 vs. ~60bp mid-morning.
  • The BoE will announce its Q125 APF schedule at 16:30. We will provide greater colour on that ahead of the release. 

BoE Meeting

Keep reading...Show less