Gilts gap up and Short Sterling strip bull-flattens

UK debt tracking core counterparts, as expected, as Liffe resumes post-FOMC, and the 10 year bond has extended gains from an initial 121.10 print to 51 ticks at 121.30, albeit lagging Bunds that have added impetus via BTPs amidst the ongoing 2019 budget impasse in Rome. Indeed, the 10 year German benchmark has inched a tad higher to 158.79 (+3/4 point) and technically could trip buy-stops amidst more pronounced selling in Italian bonds. Market contacts note that nearest upside chart targets for Bunds are 155.88-90, which incidentally were prevalent before ECB President Draghi uttered the vigorous word in conjunction with underlying inflation. Back to the UK, and 3 month contracts are also firmer with the long end outperforming in line with the Eurodollar curve on unchanged Fed dot plots flagging 5 more 25 bp hikes to 2020. Ahead, BoE speak slated from Governor Carney and chief economist Haldane.

(RANsquawk)