GILTS: Near Highs Following Recovery From Yesterday's Lows
Apr-10 14:59
Gilts operate just off session highs, with long end outperformance remaining evident on the day despite a fading of the fresh curve flattening that came in the wake of the BoE’s APF sales schedule tweak (detailed earlier).
- Yields 4-18bp lower vs. yesterday’s close, with long end yields reversing most of yesterday’s move higher
- Futures last 91.60 vs. session highs at 91.79.
- Initial resistance at the 20-day EMA (91.99) remains untested.
- A pullback in global equity benchmarks (after yesterday’s late tariff relief-induced rally) alongside weakness in oil, has factored into today’s rally.
- Gilts regain some poise after trading like a broader risk asset on Wednesday, with the UK’s fiscal fragility remaining under scrutiny during times of market tension.
- No market moving comments from BoE’s Breeden at the MNI event, who pointed to generally illiquid conditions in the long of the curve as an exacerbating factor when market volatility is evident, while stressing that the APF sales tweak was taken as a precaution and doesn’t provide a policy signal. On the economic side she stressed that her views on the labour market hadn’t changed much since January, while she chose not to pre-commit to any given future path for policy.
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EQUITIES: Some downside Continuations
Mar-11 14:45
- Broader Equities are extending losses following Trump increasing Tariffs on Canada.
- The Emini futures trades at its lowest level since September and could target the September low at 5499.25, so far printed a 5554.50 low.
CANADA: Ontario Premier-'Will Not Back Down Until Trump Tariffs Gone For Good'
Mar-11 14:45
Posting on X, Ontario Premier Doug Ford says that "Ontario and Canada will not back down until President Trump’s tariffs are gone for good." Ford confirmed that he will be interviewed on CNBC at 1105ET (1505GMT, 1605CET).
- Ford's comments come in the wake of US President Donald Trump's escalation of incoming tariffs on Canadian steel and aluminium, threats to the country's motors industry, and repeated calls for Canada to become the US' 51st state in a recent Truth Social post (see 'US-CANADA: Trump Escalates Trade War With Canada', 1416GMT).
- This latest escalation comes amid a transfer of power in Canada, with the transition process underway following former BoC and BoE governor Mark Carney's election as governing Liberal Party leader on 9 March. Globe and Mail reports that Carney is "expecting a “seamless” and “quick” transition of government after his Monday talks with outgoing Prime Minister Justin Trudeau and cabinet."
- The Globe and Mail report claims that as part of his first cabinet, Carney "will probably keep the current ministers who’ve been busiest on Canada-U.S. trade issues: Mélanie Joly in Foreign Affairs, David McGuinty in Public Safety and Dominic LeBlanc in Finance."
