UKRAINE: NYT-US Pressuring Kyiv On Concessions To End War By Early Summer

SFRJ6 96.50/96.43ps 1x1.5, bought for 1.75 in 20k.

Gilts have recovered from early London lows alongside peers.

• Futures +4 at 92.39.
• Bulls remain in technical control after the break of several key resistance levels last week.
• Resistance is now layered in at 92.62/72/91, while initial support is located at 91.84.
• Yields flat to ~1bp lower, 10s outperform on the curve.
• The ’25 low in 10s (4.363%) remains untested and protects the base of the upward sloping triangle we have previously identified (4.339% today).
• The presence of this morning’s GBP4.5bln 4.75% Oct-35 gilt auction didn’t provide much in the way of concessionary headwinds. The auction ultimately generated strong demand (highest bid-to-cover at a 10-year auction since August and the second highest ever volume of bids at a 10-year gilt auction), factoring into 10-Year outperformance.
• Comments from BoE MPC member Taylor reaffirmed his well-known dovish stance. He noted that “we can now see inflation at target in mid-2026, rather than having to wait until 2027 as in our previous projection. I see this as sustainable, given cooling wage growth, and I now therefore expect monetary policy to normalise at neutral sooner rather than later, as I said in the December minutes.”.
• GBP STIRs essentially flat on the day, 44bp of easing priced through year-end, next 25bp step not fully discounted until the end of the June MPC.