Bouncing From Cheaps After Wider Weakness Weighed, Early Lows In Futures Hold

The weakness in wider core global FI markets applied pressure to gilts.

• That was before the early session low in futures held alongside some stabilisation in wider core global FI markets, which limited the move.
• Gilt futures last show +40 on the day after a relatively aggressive bounce from lows, while cash gilts run 1-3bp richer, bull steepening.
• Relative post-auction weakness in the long end remains a theme after soft demand was once again evident at the latest round of 30-Year supply, while UK paper still outperforms Bunds & U.S. Tsys across the curve.
• SONIA futures sit flat to +3.0bp through the blues, after looking to the long end for direction in recent trade. The strip flattens.