POWER: SwePol Power Link Reduces Capacity in Unplanned Outage

Gilts edge away from session lows after the aforementioned yield levels hold across the curve and in the U.S. long end.

• A downtick in crude oil provides some background support in more recent trade, while bounces in equities remain relatively limited.
• Today’s low in futures (90.39) protects key support at the April 9 low (89.99), contract last -51 at 90.62.
• A reminder that our latest positioning indicator points to very long positioning in gilt futures ahead of the roll, with the presence of Monday’s bank holiday skewing activity a little earlier in the cycle (first notice for M5 is May 29).
• Yields now 3.5-5.5bp higher, curve holds steeper.
• 2s10s stick within the multi-week range, 11bp below April cycle closing highs, last ~67bp.
• 5s30s in a similar pattern, also 11bp below cycle closing highs, last ~127bp.
• GBP STIRs remain off session extremes but are still more hawkish than levels that prevailed yesterday.
• SONIA futures flat to -5.0, while BoE-dated OIS shows ~36bp of cuts through year-end vs. a little over 40bp late yesterday.
• Public finance data, flash PMIs and BoEspeak from Pill, Breeden & Dhingra are due on Thursday.

• -20,000 UXYM5 111-19, sell through 111-20.5 post time bid at 1042:10ET, appr DV01 $1.8M.
• the 10Y ultra contract has since bounced to 111-21.5 last (-14)

GM5/U5 roll ~8K sold at 1/0, only 200 trade at 0.