Benefitting From Wider Bid

The broader bid in core global FI markets supports gilts, allowing futures to gap higher, last +35, bulls look to establish themselves after retaking 95.00.

• Cash benchmarks sit 2.5-4.5bp richer as the curve flattens.
• Local headline flow has been limited since yesterday’s close, leaving wider cues at the fore.
• SONIA futures tick away from lows as gilts open and core FI firms a little, with contracts -1.0 to +2.5 through the blues. A light twist flattening bias is seen.
• BoE-dated OIS also sees twist flattening. 11bp of tightening is showing for November, with terminal policy rate pricing sitting around 20bp above prevailing levels i.e. roughly 80% odds of one further rate hike in the cycle is priced.
• Today will see the DMO tender GBP750mln of the 50-year 1.125% Oct-73 gilt (more on that here).
• A quick reminder that tomorrow will see us (MNI) host a speech and Q&A session with Andrew Hauser, Executive Director for Markets at the Bank of England.