A Little Softer & Steeper To Start

Gilt futures chip away at yesterday’s gains given the pullback in wider core global FI markets.

• Gilt futures are -15 at 103.62, ~10 ticks off the base of their early 41-tick range.
• Technically, the current uptrend in the contract remains intact. It traded to a fresh trend high yesterday, reinforcing bullish conditions. The focus is on 104.00 next. Initial firm support lies at 100.20, the Dec 13 high. Short-term weakness would be considered corrective.
• Cash gilt yields are 1.5-3.0bp higher, with some modest bear steepening seen.
• SONIA futures are flat to -3.0 through the blues.
• BoE-dated OIS is roughly in line with levels we flagged earlier, running little changed to 2.5bp firmer on the day through ’24 MPC meetings.
• Local headline flow has centred on fiscal loosening and speculation re: the general election date after we discovered that the Budget will be released on 6 March ’24.
• The domestic docket is relatively limited through the remainder of the year.