US TSY FUTURES: Short Setting Dominated On Thursday

Downticks in equities support gilts through early London trade, with solid demand at the GBP300mln 4.25% Dec-49 gilt tender also noted.

• Futures +7 at 90.95, respecting yesterday’s high (91.00).
• Bears remain in technical control after piercing key support earlier in the week. Initial support at this week’s low (89.76), while initial resistance is located at the 20-day EMA (91.07).
• Yields ~1.5bp lower across most of the curve.
• Short end pricing steady, showing ~45bp of easing through November.
• Political matters remain at the fore after PM Starmer received public ministerial support on Monday, calming speculation surrounding an expedited leadership challenge/confidence vote.
• The latest press speculation, via Guardian source reports, suggests that Health Secretary Streeting could challenge PM Starmer within weeks (after the Gorton & Denton by-election). Most still expect any serious leadership challenge to come after the local elections in May.
• Little of note on the UK economic calendar, with preliminary Q4 GDP data due tomorrow.
• The delayed U.S. NFP release will headline the wider calendar today, with the recent run of soft U.S. jobs data conditioning markets for a softer-than-expected print.
• Outside of the tender, the DMO has noted that it will launch a new green gilt maturing on 7 March 2037 in the week commencing 9 March. We expect a GBP6.5bln transaction size for now.