Bid On Back Of French PMIs, domestic Readings & BoE QT due

Softer than expected preliminary PMI data out of France gives Gilts the first real catalyst to trade off this morning, after tracking core global FI markets cheaper at the open. The softer than expected French data pushes Gilt futures to the highest levels seen since Wednesday of last week, last running +10 or so, while the cash benchmarks are little changed to 2bp richer on the day, with some light outperformance for the belly/intermediates as the space operates a little shy of post-data bests.

• SONIA futures are flat to +4.0 through the greens, with the back end of the reds and front end of the greens outperforming.
• BoE-dated OIS pricing comes in by 1-2bp on the day, leaving a follow up 50bp hike at next month’s BoE meeting essentially 50% priced, while terminal policy rate pricing continues to show just above 5.90%.
• Flash PMI data headlines the domestic docket today, while the BoE will conduct long end Gilt sales as part of its QT scheme. The remainder of the flash Eurozone PMI readings will also garner attention.