A Touch Firmer To Start, Futures Stick to Friday’s Range

Gilts look to the uptick in wider core global FI markets (largely driven by dovish ECB speak from Villeroy and heightened Middle East-centric geopolitical worry) early today, although continued speculation re: fiscal loosening (the potential for further National Insurance cuts got airtime in the local press via weekend source reports) likely helped temper the bid, along with a tick away from best levels for wider core bond markets.

• The bid in futures ran out of steam before bulls could test Friday’s high (98.78). The contract last shows +25 at 98.59, 16 ticks shy of the early Monday peak.
• Cash gilt yields are 0.5-2.0bp lower with the curve seeing some light bull steepening.
• SONIA futures are back from best levels alongside wider core global FI markets, last showing -0.5 to +4.5 through the blues.
• BoE-dated OIS stabilises showing 107-108bp of cuts through ’24, with ’24 contracts running little changed to 3.5bp softer on the day.
• Note that the BoE will conduct APF sales from its short maturity bucket later today.
• Thursday’s BoE decision headlines the domestic docket this week (expect our full preview to cross on Tuesday). While expectations are for no change in the policy rate focus will fall on the Bank’s updated economic projections, guidance verse, details of the policy debate in the minutes and the vote spit.