US: MNI POLITICAL RISK - Trump Tariffs Struck Down By Trade Court

Gilt futures continue to respect initial resistance at Friday’s high (93.34), topping out at 93.33 for a second consecutive session.

• Still, the bullish technical phase in the contract remains intact, with pullbacks remaining relatively shallow at this stage.
• If the move does develop further, through a break of Friday’s high, focus would quickly shift to the nearby 76.4% retracement of the April 7-9 sell off (93.44).
• Yields are 1-3bp lower on the day, with 10s outperforming and 50s lagging.
• Gilt bulls eye 4.460% in 10-Year yields.
• 2s10s continue to trade around 16bp below cycle closing highs, although the spread has failed to close back below 60bp since the break above in early April, last ~62.8bp.
• 5s30s is ~10bp below cycle closing highs, last 128bp.
• As we have previously noted, while fundamentals (the potential for a more activist BoE easing cycle, tepid economic growth and ongoing fiscal fragility) point to further curve steepening, already crowded steeper plays and apparent increased activism from public agencies (Treasury, DMO & the BoE) when it comes to limiting long end yield spikes presents risks/limitations to such moves, at least in the short-term.

• Reoffer: 87.014 to yield 3.834%
• Spread set earlier at 3.00% Jul-49 OAT + 13bps (guidance was +15bp area)
• Size: E5bln (MNI expects E4-8bln)
• Books in excess of E74bln (inc JLM interest)
• Settlement: May 7, 2025 (T+5)
• Bookrunners: Barclays, BNPP (B&D), BofA, CA-CIB, HSBC, Natixis
• Timing: MNI expects to price today

Source: Bloomberg and MNI colour

• GBP225.0mln had been on offer.
• This leaves GBP15.050bln of the linker in issue.