A Little Firmer To Start

In a similar start to SONIA, Gilt futures trade both sides of late Monday levels before settling a little higher post-labour market data.

• A light downtick in global equity benchmarks helps the bid.
• Futures sit +35, sticking with yesterday’s range, while the cash benchmarks are ~2bp richer in a parallel shift.
• SONIA futures re flat to +5.0, as the strip flattens through the blues.
• BoE-dated OIS sits little changed to ~2bp softer, with ~21.5bp of tightening showing for this month’s MPC, while terminal policy rate pricing moves back to ~5.65%.
• The mixed bag of domestic labour market data provided a ‘something for everyone’ feel, with most deeming the data as a bit of a non-event when it comes to furthering BoE discussions/debate.
• Initial signs of a loosening UK labour market remain in place.
• Domestically, monthly economic activity data is due tomorrow, but focus is now on next week’s CPI data.
• Long-dated I/L supply is due later this morning.