Bull Steepening Apparent, Lower Tier Local

Gilts conform to the wider bull steepening dynamic observed in core global FI. That leaves the major cash benchmarks running 3-6bp richer, while Gilt futures are ~50 ticks firmer on the day, a little shy of early highs.

• Lower tier domestic data will be aiding the bid at the margins, with the latest Citi/YouGov inflation expectations metrics easing and the Lloyds Business barometer moving lower.
• Month-end extension estimates point to limited support for Gilts from related flows as May comes to an end.
• Broader core global FI moves have helped bias BoE-dated OIS a touch lower since Friday, with terminal pricing currently indicating just under 100bp of further tightening during the current cycle, ~10bp below levels indicated at Friday’s close.
• Comments from BoE’s Mann present the headline domestic risk event during the remainder of today’s session. She will be speaking on a panel covering central banks, inflation and monetary policy.