A Touch Softer To Start, Global Cues Eyed

Gilt futures look to overnight direction from Tsys/Bunds for guidance at the open before core global FI stabilises a little.

• That leaves the contract lower but within the range observed on Thursday, last -25.
• The major cash benchmarks are 2-3bp cheaper, with the curve bear flattening.
• SONIA futures run flat to 5bp cheaper through the blues.
• BoE-dated OIS is flat to a touch firmer, ~28.5bp of tightening is priced for next month, with terminal policy rate pricing at ~5.91%.
• Overnight we saw the latest domestic GfK consumer confidence print rebound a little, although it still sits at -25. The survey collator noted that “against a backdrop of falling core inflation, higher interest rates and rising average weekly earnings, the Consumer Confidence Index has regained momentum this month.”
• A quick reminder that UK markets will be closed on Monday, owing to a UK bank holiday.
• It also worth remembering that BoE’s Broadbent will speak over the weekend. He will participate on a Jackson Hole panel covering the topic of “Globalization at an Inflection Point.”