GILTS: Cross-Market Cues Still Dominate, Bears Remain In Tech Control
Mar-07 15:44
Cross-market cues dominate in afternoon trade, with the softer-than consensus U.S. labour market report and weakness in e-minis resulting in a modest net rally (a pullback from highs in Tsys was evident before fresh equity weakness kicked in).
- Futures traded as high as 92.63 before easing back to ~92.35 last.
- Bears remain in technical control, although the contract is still in oversold territory.
- Bulls have pierced the next couple of resistance levels and will ultimately look to close the gap to the Mar 4 low (93.06).
- Yields 2-4bp lower, 10s outperform.
- Dovish move in GBP STIRs seen alongside the bid in the long end.
- BoE-dated OIS shows 54bp of cuts through year-end, with the next 25bp cut once again fully discounted come the end of the June MPC.
- SONIA futures little changed to +9.5.
- Monthly economic activity data (Friday) and the latest S&P-KPMG-REC Report on Jobs (Monday) headline next week’s limited UK data schedule.
- Next week will also see the DMO propose and confirm the auction calendar for the first three weeks of FY25/26.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
OPTIONS: Expiries for Feb06 NY cut 1000ET (Source DTCC)
Feb-05 15:33
- EUR/USD: $1.0250(E1.5bln), $1.0300(E1.0bln), $1.0315-25(E2.2bln), $1.0350-55(E1.1bln), $1.0370-80(E1.5bln), $1.0390-10(E2.8bln), $1.0430-50(E2.4bln), $1.0500(E1.2bln)
- USD/JPY: Y152.50($720mln), Y153.90($1.4bln)
- EUR/JPY: Y159.30(E878mln)
- GBP/USD: $1.2455(Gbp1.4bln), $1.2550(Gbp1.1bln)
- EUR/GBP: Gbp0.8465(E1.1bln)
- USD/CAD: C$1.4200($1.8bln)
- USD/CNY: Cny7.3000($524mln), Cny7.3550($648mln)
GILT AUCTION PREVIEW: On offer next week
Feb-05 15:31
The DMO has announced it will be looking to sell GBP1bln of the 0.625% Mar-45 linker (ISIN: GB00BMF9LH90) at its auction next Wednesday, February 12.
STIR: Further Modestly Dovish Reaction To ISM Services Miss
Feb-05 15:30
- Fed Funds implied rates have eased a little lower on the softer than expected ISM services report for January, currently 0.5-2.5bp lower, with some limit considering the large declines seen over the past two days.
- The ISM report included a firm pullback in the prices paid component but it followed an outsized increase in December (the survey estimate on Bloomberg only had three analysts) and as we note in our 1014ET bullet, adverse weather conditions were highlighted by many respondents.
- Cumulative cuts from 4.33% effective: 5bp Mar, 12.5bp May, 23bp May, 30bp Jul and 50bp Dec.
