Bounce From Lows, Wider Market Swings And Reduced Gilt Issuance Requirement Eyed

Gilt participants seem happy to track wider core global FI moves to start the week.

• Political matters have dominated on the UK headline front, with the latest UK cabinet reshuffle coming on the back of the removal of Suella Braverman from the post of Home Secretary.
• Elsewhere, a soft Rightmove house price index reading and sell-side speculation/estimates surrounding a reduction in gilt issuance needs in next week’s Budget (which may be aiding gilts) have garnered attention.
• Gilt futures have bounced from worst levels after a brief and limited showing through Friday’s base.
• Gilt futures last +5, 50 ticks off session lows and a little under 10 ticks shy of recovery highs.
• Cash gilt yields are 1.5-3.0bp lower across the curve.
• SONIA futures now operate -0.25 to +1.5 through the blues, after tracking swings in gilts.
• BoE-dated OIS is little changed to ~3bp softer across the major contracts.
• A quick reminder that the BoE will sell gilts in the short maturity bucket today.
• Elsewhere, the previously outlined rounds of BoE speak provide the local points of interest, with tier 1 data (CPI, labour market report and retail sales) scheduled through the remainder of the week.