A Touch Firmer As Lower Tier Inflation Data Eases A Little

Gilts assess the mix of post-settlement moves in core global FI futures and the latest moderation in the domestic BRC shop price index (headline still above 6% Y/Y, although September saw the first monthly drop in food inflation in 2 years) during early trade.

• Futures a little higher as a result, last +15 or so.
• Technically, conditions in futures remain bearish and yesterday’s move lower reinforces this theme.
• Yesterday’s low (92.54) provides initial support.
• Meanwhile, cash benchmarks are 2.5-4.0bp richer as the curve bull steepens.
• 2s10s move to the least inverted level seen since June, hovering around -41bp, while 5s30s operate around the -5bp area.
• SONIA futures last show 1-4bp richer through the blues.
• BoE-dated OIS soften by 1-4bp through the liquid contracts.
• GBP2.25bn of 1.50% Jul-53 green gilt supply is due today.