GILTS: Continue To Recover From Lows
Gilts trade further away from early session lows as global equity index futures continue to move away from early London highs.
- Futures traded as low as 90.71 before bouncing to ~91.50.
- The technical trend in the contract has turned bearish, with any fresh extension lower set to target Fibonacci support at 90.49.
- Bulls need to retake yesterday’s low (91.56) to start turning the tide back in their favour.
- Yields last 1bp lower to 3bp higher on the day, 6-10bp off session highs. 10s still lead the sell off.
- Curve twist steepens.
- Spread tightening to Bunds continues to extend, with the 10-Year spread ~4bp narrower on the day, as the push for looser German fiscal policy reshapes cross-market ranges.
- GBP STIRs follow long end cues.
- BoE-dated OIS shows 51.5bp of cuts through year-end vs. 44bp early today.
- SONIA futures last +2.5 to -1.0.
- The findings of the latest BoE DMP survey didn’t seem to favour a swifter pace of BoE easing, but cross-market/macro moves have outweighed that release.
- Comments from BoE hawk-turned-dove Mann are due this afternoon (15:00 GMT), although expect macro and cross-market cues to continue to dominate.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Mar-25 | 4.457 | +0.2 |
May-25 | 4.268 | -18.7 |
Jun-25 | 4.212 | -24.3 |
Aug-25 | 4.079 | -37.6 |
Sep-25 | 4.041 | -41.4 |
Nov-25 | 3.959 | -49.6 |
Dec-25 | 3.940 | -51.5 |
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
EGBS: Bund Futures Below Yesterday's Settlement Levels Alongside USTs
Bund futures are 42 ticks below yesterday’s settlement levels at 132.87, with core FI markets unwinding a little of yesterday’s tariff risk-premium following agreements between the US and Mexico/Canada. The reaction to China’s retaliatory actions overnight has been relatively contained.
- Initial short-term support in Bunds is not seen until the 20-day EMA at 132.14.
- German yields are around 4bps higher across the curve, though 10-year yields at 2.423% remain comfortably below Friday’s closing levels of 2.459%.
- 10-year EGB spreads to Bunds are up to 1.5bps tighter, with European equity futures continuing to inch higher.
- The OAT/Bund spread remains above 70bps, with medium-term fiscal and political risks still present despite PM Bayrou looking likely to survive tomorrow’s censure motion.
- Austria sold E1.725bln of 5/15-year RAGBs this morning. We remain on the lookout for syndication announcements from Belgium, Germany and Italy.
SECURITY: Iran's Nuclear Programme In Focus Ahead Of Trump-Netanyahu Meeting
Israeli Prime Minister Benjamin Netanyahu will meet President Donald Trump at the White House at 16:00 ET 21:00 GMT. Following a one-hour bilateral meeting, Trump and Netanyahu will deliver a joint press conference at 17:10 ET 22:10 GMT. Netanyahu is expected to stay in the US until at least Saturday for meetings with US officials and lawmakers.
- The meeting comes amid concerns about the implementation of phase two of the Gaza ceasefire agreement. Trump told reporters at the Oval Office yesterday that there are “no guarantees” the ceasefire will hold: “We'll see how it all turns out. It's complex".
- Politico notes: “Israel has yet to name a negotiating team for the second phase of talks, which will seek to turn the six-week cease-fire into a permanent cease-fire … That move has sparked worries in some corners that Israel could undermine efforts to fully end the war [against Hamas].”
- The meeting is likely to touch upon Iran’s nuclear programme and a plan to normalise relations between Israel and Saudi Arabia – a key pillar of Trump’s Middle East policy.
- Former national security advisor, Jake Sullivan, told FT this week that Netanyahu will be “sorely tempted” to take advantage of Iran’s weakness to strike Tehran’s nuclear facilities.
- New York Times reports on new US intelligence, likely to be discussed: “Iran’s engineers are exploring how to rapidly turn stockpiles of nuclear fuel into a workable, but perhaps crude, atomic weapon, should the country’s leaders decide to race for a bomb.”
EGB OPTIONS: Outright Bobl call seller
OEH5 118.25c, sold at 15.5 down to 14.5 in 14k.
