Bear Flattening, Front End Losses A Little More Pronounced Than On German Curve

The early bear flattening on the Gilt curve remains evident, with the major cash benchmarks running 2.5-5.5bp cheaper. Futures last sit ~20 ticks lower on the day, 15 ticks off session lows,

• While we haven’t seen much in the way of domestic headline drivers to note, the move in the front end of the Gilt curve has been a little more pronounced than what we have seen on the German curve (although both now operate off of session cheaps).
• This is with the SONIA strip running little changed to 4.5bp cheaper through the reds, also off session lows, with the move in the red generally outstripping moves in EURIBOR, which is perhaps reflective of the perceived differences in headroom until we reach BoE & ECB terminal rate pricing (filtering into the front end of the Gilt curve).
• The local docket is empty ahead of the weekend.