GILTS: Off Lows, Flattening Fades
May-20 15:21
The sell off in gilts has stalled as Tsys recover from session lows, leaving gilt futures within the range observed over Friday & Monday, last -34 at 91.16.
- The range extremes witnessed over the prior couple of sessions continue to present initial support and resistance (90.86/92.23).
- Flattening impulse generated by BoE chief economist Pill fades, yields now ~3bp higher across the curve.
- 2s registered fresh May highs at 4.066% before gilts recovered from lows, next upside level of interest seen at the April 10 high (4.078%).
- 5s saw a similar pattern develop but yields further out the curve respected highs seen in recent sessions.
- 5s30s is set to respect the April 14 closing low (~123bp) mentioned earlier, back above 125bp..
- BoE-dated OIS stabilises around pricing 40bp of cuts through year-end, with ~60% odds of a 25bp cut priced through August and just over 80% odds priced through September, before ~33bp of cumulative easing is priced through November.
- SONIA futures remain under pressure after Pill’s comments were digested/wider core global FI moves factored in, with some of the whites and reds through last week’s lows. Contract last 0.25-5.0 lower across the strip.
- Terminal rate pricing for the current cutting cycle (proxied by SFIU6 at present) last prints at 3.68% after testing last week’s hawkish extreme of 3.685% earlier in the session.
- UK CPI data is due tomorrow morning, our preview is here.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Jun-25 | 4.202 | -0.9 |
Aug-25 | 4.063 | -14.8 |
Sep-25 | 4.002 | -20.8 |
Nov-25 | 3.877 | -33.3 |
Dec-25 | 3.816 | -39.5 |
Feb-26 | 3.734 | -47.7 |
Mar-26 | 3.722 | -48.8 |
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
CARNEY ELECTION PLATFORM HAS CAD225B OF DEFICITS OVER FOUR YRS
Apr-19 13:51
- CARNEY ELECTION PLATFORM HAS CAD225B OF DEFICITS OVER FOUR YRS
- CARNEY SEES 2025-26 BUDGET DEFICIT OF CAD62.3B OR 2% OF GDP
- CARNEY PLANS TO REACH 2% NATO TARGET BEFORE 2030
- CARNEY SEES NEW CAD10B ANNUAL PLAN FOR GREEN TRANSITION BONDS
LOOK AHEAD: Eurozone Timeline of Key Events (Times BST)
Apr-18 05:18
| Date | Time | Country | Event |
| 25-Apr | 0745 | FR | Manufacturing Sentiment |
| 29-Apr | 0700 | DE | GFK Consumer Climate |
| 29-Apr | 0800 | ES | HICP (p) / GDP |
| 29-Apr | 0900 | EU | M3 / Consumer Expectations Survey |
| 29-Apr | 0900 | IT | ISTAT Confidence Indices |
| 29-Apr | 1000 | EU | Consumer Confidence, Industrial Sentiment |
| 30-Apr | 0630 | FR | GDP (p) / Consumer Spending |
| 30-Apr | 0700 | DE | Import/Export Prices / Retail Sales |
| 30-Apr | 0745 | FR | HICP (p) / PPI |
| 30-Apr | 0855 | DE | Unemployment |
| 30-Apr | 0900 | DE | GDP (p) / State level CPI |
| 30-Apr | 0900 | IT | GDP (p) |
| 30-Apr | 1000 | EU | GDP preliminary flash est. |
| 30-Apr | 1000 | IT | HICP (p) |
| 30-Apr | 1100 | IT | PPI |
| 30-Apr | 1300 | DE | HICP (p) |
JGBS: Twist-Steepener Holds Going Into W/E, BoJ Gov Ueda Reiterates Caution
Apr-18 05:16
JGB futures are stronger, +18 compared to settlement levels, sitting near the middle of the range after a choppy session.
- “Governor Kazuo Ueda reiterates his stance that the central bank will carefully monitor if its economic outlook will be realized, accounting for the effects of US tariff measures, without preconception. The BoJ will raise the benchmark rate if the outlook is realized, Ueda says in response to questions in parliament.” (per BBG)
- “Fukoku Mutual Life Insurance Co. plans to invest in Japan's super-long government bonds this fiscal year after their yields skyrocketed. The company aims to increase domestic government bond holdings by ¥30 billion, with gross purchases potentially reaching ¥300-400 billion.” (per BBG)
- Earlier today, Headline CPI for March showed +3.6% y/y versus +3.7% estimate. Core and Core-Core printed +3.2% y/y and +2.9% y/y, respectively, versus estimates of +3.2% and +2.9% and priors +3.0% and +2.6%.
- Cash US tsys are closed today for the Good Friday holiday.
- Cash JGBs have twist-steepened, pivoting at the 20-year, with yields 2bps lower to 5bps higher.
- Swap rates are 2bps lower to 2bps higher, with a steepening bias.
- On Monday, the local calendar will see Tokyo Condominiums for Sale data.
