GILTS: Holding Away from Lows After PMIs, Curve Steeper
Jul-24 09:35
Gilts hold off lows after the softer-than-expected flash services PMI data allowed the space to move further away from lows in the wake of some pre-data stabilisation.
- Early extension of yesterday’s late move lower followed hopes surrounding reduced EU-U.S. tariff rates.
- Initial support in futures (91.29) held to the tick, with a subsequent recovery to ~91.55.
- Note that bears remain in technical control. Any extension lower would expose the bear trigger at the July 18 low (91.08).
- Yields little 0.5-2bp lower, curve bull steepens.
- 2s10s last 76.5bp. a reminder that the 80bp provided meaningful resistance earlier this month.
- 5s30s move towards 145bp, next upside level of interest located at the ’25 intraday high (147.2bp).
- SONIA futures recovered from lows alongside gilts, last +0.5 to -2.0.
- BoE-dated OIS still shows over 90% odds of a cut for August, with just under 50bp of easing priced through year end.
- The labour market component of the PMIs read dovishly, particularly in light of BoE Governor Bailey’s recent dovish warnings surrounding that area of the economy.
- Little of note on the UK economic calendar through the reminder of the day, leaving focus on cross-market and macro cues, with a particular interest on the language deployed at the latest ECB decision (no change in rates almost universally expected).
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Aug-25 | 3.992 | -22.5 |
Sep-25 | 3.947 | -27.0 |
Nov-25 | 3.789 | -42.8 |
Dec-25 | 3.727 | -49.0 |
Feb-26 | 3.613 | -60.5 |
Mar-26 | 3.580 | -63.7 |
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
EGB SYNDICATION: Slovenia 10-year SLB: Update
Jun-24 09:34
- New 10-year Jul-35 SLOREP SLB. Revised guidance at MS + 65bps area (initial was MS+70bps Area)
- Coupon: Annual, act/act ICMA. Step up/down in July 2034, the first coupon post the last reporting date (Dec 2033) for the year ending on the Target Observation Date
- Size: E1bln WNG
- Books: In excess of E3.1bln (incl E415mln JLM)
- Maturity: July 2, 2035
- ISIN: SI0002105052
- Settlement: July 2, 2025 (T+6)
- Bookrunners: Barclays, BNPP, CA-CIB, DB (B&D), JPM, OTPBSI
- Timing: Books open, today's business
Details per market source with MNI colour.
GERMAN AUCTION RESULTS: 1.70% Jun-27 Schatz Results
Jun-24 09:33
| 1.70% Jun-27 Schatz | Previous | |
| ISIN | DE000BU22098 | |
| Total sold | E4bln | E4.5bln |
| Allotted | E3.066bln | E3.678bln |
| Avg yield | 1.85% | 1.78% |
| Bid-to-offer | 2.24x | 2.39x |
| Bid-to-cover | 2.92x | 2.92x |
| Avg Price | 99.712 | 99.844 |
| Low Price | 99.710 | 99.840 |
| Pre-auction mid | 99.705 | 99.831 |
| Previous date | 03-Jun-25 |
BOE: Greene: First glance balanced reiterates "careful and gradual"
Jun-24 09:32
- "The main messages for me remain the same: underlying activity is weak, the labour market has loosened further and the disinflationary process continues, albeit with an elevated plateau of inflation around 3.5% for the second half of this year."
- "I continue to think the risks remain two-sided but skewed to the downside on growth and to the upside on inflation. This is an uncomfortable place to be for a central banker. Given the period of elevated inflation through which we have just come, I think price stability is the key priority. But extracting a clear signal on this amongst increased noise and uncertainty is difficult. On the domestic front, noisy data means that it will take longer for me to take comfort from recent disinflationary trends. On the global front, there are a number of key events playing out between now and our next meeting, including the deadline for the pause on so-called “reciprocal tariffs” from the US, the potential passage of a budget in the US and the unfolding of events in the Middle East. It’s unlikely that the uncertainty from these events – and subsequent developments – will be resolved any time soon. I therefore think a careful and gradual approach to removing monetary policy restrictiveness continues to be warranted."
