CHINA-RUSSIA: SCMP-Putin Visit To Beijing 20 May, Will Discuss Trump Visit w/ Xi

TYM6 114.00 calls paper paid 0-06 on ~3.5K, balance of a 5K order remains bid at that level.

Gilts have faded from highs, with ongoing signals of U.S. forces manoeuvring around the Gulf limited any pullbacks in crude linked to optimism surrounding the potential for U.S.-Iran talks in the immediate term.

• Gilt futures +9 at 88.98, fading from early highs of 89.31.
• Bulls still need to force a break of the April 9 high (90.21) to provide a more meaningful risk to the bearish technical backdrop.
• Yields are little changed across the curve.
• Bulls need to see clear breaks below March 18 lows across benchmark yields to negate some of the bearish technical theme.
• Energy price swings linked to the situation in the Middle East will continue to dominate matters in the immediate term. Positive steps towards de-escalation would be supportive of bull steepening patterns on the curve, while negative developments would reintroduce bear flattening.
• BoE-dated OIS pricing ~37bp of hikes through year-end vs. a little under 45bp early yesterday and 40bp before yesterday’s dovish comments from ECB’s Lagarde spilled over.
• BoE Governor Bailey will speak again today. One of his appearances will cover stablecoins, while the other will cover global imbalances.
• HE remained non-committal when it comes to the monetary policy outlook when he spoke on Tuesday.