Bear Flattening Alongside Bunds, No Surprises In DMO Meeting Minutes

Gilt futures initially show lower at the open, before recovering from session lows, in line with wider core global FI markets in the wake of the initial German regional CPI data.

• Gilt futures last -10.
• Cash trade sees the major benchmarks sitting 3-4bp cheaper, with the curve flattening at the margin.
• Local headline flow has been somewhat muted, with continued focus on fragilities in the housing market.
• The minutes of the latest DMO meeting with GEMMS and investors pointed to strong support for the syndication of a new 20-Year conventional line in the final quarter of calendar ’23, while views surrounding an I/L syndication were a little more mixed (see earlier bullet for more colour on this, there were no meaningful surprises when it came to the syndication side of the release).
• SONIA futures run flat to -4 through the blues, with the greens & reds leading the weakness.
• Lower tier local data, in the form of credit and money supply, present the highlight of a limited local docket on Wednesday.