GILTS: Looking To Wider Cues, Curve A Little Flatter On The day

Cross-market cues have shaped gilt trade early on Friday, with a recovery from early London lows in core global FI markets pulling UK paper away from lows seen around the open.

• Futures -7 at 93.41, range 93.06-93.51.
• The short run bullish phase in the contract has extended in recent sessions, with the post-BoE high (94.35) now initial resistance. Initial support at the 20-day EMA (92.43).
• Yields little changed to 2bp lower, curve initial post-BoE reaction lows remain untested. Curve flatter on the day.
• 10-Year gilt/Bund spread little changed at ~210bp.
• GBP STIRs have generally tracked broader swings in core global FI markets.
• BoE-dated OIS is still pricing ~60bp of cuts through year-end after early nearly fully discounting 75bp of easing shortly after yesterday’s BoE decision was delivered.
• SONIA futures are little changed to -4.5.
• Domestic focus will fall on comments from BoE chief economist Pill (12:15 London), as he briefs on yesterday’s monetary policy decision. This briefing will likely be dominated by the wider MPC’s views as opposed to his own personal leanings.
• Macro inputs of note include the ECB’s latest study on r* and the monthly U.S. NFP release.