Bear Flattening Again, Although Off Opening Cheaps

Gilt futures gap lower at the open before recovering from worst levels, trading in sympathy with moves in wider core global FI markets, leaving the contract -20 or so at typing, well within the boundaries established in yesterday’s session. Cash Gilts are 1-4bp cheaper as the curve bear flattens.

• BoE-dated OIS trade on the front foot in tandem, retracing some of yesterday’s U.S. IJC-inspired move away from session highs, with terminal rate pricing sitting back around the 5.90% mark.
• SONIA futures are little changed to 6bp cheaper through the greens, off early lows, with a steepening bias apparent.
• Local news flow has been a little limited since yesterday’s close.
• The latest BoE/Ipsos inflation expectations survey headlines a limited domestic docket today. Further out, next week’s tier 1 UK data releases include the monthly inflation and retail sales readings, as well as flash PMIs, although it will be the latest Bank of England monetary policy decision (Thursday) that gets the most attention.