EMISSIONS: Corporates With Decarbonisation Targets Rise By 97% Since 2023
Companies representing over 40% of global market capitalisation now have emissions reduction targets...
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GILTS: Off Lows As Support Holds & Oil Softens, 50bp BoE Cuts Priced Through Dec
Gilts trade away from lows after support in futures held and with oil prices edging lower. Still, yields are higher across the curve in the wake of this morning’s firmer-than-expected CPI reading.
- Gilt futures last -16 at 91.41 vs. session lows at 91.17. June 2 low (91.16) provides key support.
- Yields 1.5-2.5bp higher, 5s under the most pressure.
- 2s remain rangebound.
- 10s briefly pierced the June 9 high (4.673%).
- STIRs price around ~50bp of cuts through year-end, with over 80% odds of the next cut priced through August. Market priced ~58bp of cuts through year-end at one stage on Monday.
- A reminder that while the UK CPI data was firmer-than-expected it wasn’t too out of line vs. BoE expectations.
- That means that the market remains comfortable with discounting a once per quarter rate cutting cycle through year end, given the softening labour market and still stagnant economic growth.
- What’s more, BoE Governor Bailey’s weekend comments were dovish and centred on the labour market, which increases the importance of tomorrow’s labour market data release.
- The 4.50% Sep-34 gilt PGT saw solid enough demand and pricing metrics but wasn’t quite as well-received as yesterday’s PGT.
- Little of note on the UK calendar for the remainder of the day, leaving focus on U.S. PPI data and any ongoing reaction to the domestic CPI print.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Aug-25 | 4.009 | -20.8 |
Sep-25 | 3.956 | -26.1 |
Nov-25 | 3.794 | -42.3 |
Dec-25 | 3.710 | -50.7 |
Feb-26 | 3.582 | -63.5 |
Mar-26 | 3.549 | -66.8 |
GERMAN AUCTION RESULTS: 30-year Bund results
| 1.25% Aug-48 Bund | 2.90% Aug-56 Bund | |
| ISIN | DE0001102432 | DE000BU2D012 |
| Total sold | E1bln | E1.5bln |
| Allotted | E800mln | E1.129bln |
| Previous | E1.313bln | E4bln |
| Avg yield | 3.13% | 3.22% |
| Previous | 3.09% | 3.03% |
| Bid-to-offer | 3.69x | 1.05x |
| Previous | 3.68x | |
| Bid-to-cover | 4.60x | 1.40x |
| Previous | 4.20x | |
| Avg Price | 69.39 | 93.78 |
| Low Price | 69.38 | 93.76 |
| Pre-auction mid | 69.276 | 93.710 |
| Prev avg price | 69.86 | 97.38 |
| Prev low price | 69.85 | |
| Prev mid-price | 69.810 | |
| Previous date | 14-May-25 | 06-May-25 |
EGBS: Bund Futures Off Session Lows But Bearish Theme Still Dominant
Bund futures are off session lows following a downtick in Brent crude futures, but remain -6 ticks at 129.40. A bearish technical theme remains intact, with initial support the July 14 low at 129.08, clearance of which would expose the key support at 128.97 (May 14 low).
- German yields are off earlier highs, now up to 0.5bps lower across the curve. Germany will sell E1.0bln of the 1.25% Aug-48 Bund alongside E1.5bln of the 2.90% Aug-56 Bund at 1030BST.
- In France, opposition politicians have been lining up to criticise the budget proposals announced by PM Francois Bayrou on 15 July. There is a strong likelihood that, given the gov'ts minority status, Bayrou will have to push the budget through using Article 49.3 of the French constitution in order to avoid a vote.
- The 10-year OAT/Bund spread remains fairly insulated though, currently 0.5bps tighter at 69bps.
- Broader EGB spreads to Bunds are also little changed, with European equity futures off earlier lows.
- The Eurozone May trade surplus was larger than expected at E16.2bln (vs E14.0bln prior).
- Broader global focus will be on the US PPI report at 1330BST following yesterday’s CPI reading, which started to show some tariff impact in core goods categories.
