Bull Steepening Early On

The curve bull steepens in early trade, as the move off yesterday’s session cheaps extends a little. Cash Gilts are 2-6bp richer, while futures sit +20 or so. A quick reminder that paper out to 10s printed fresh cycle highs in yields yesterday, with some of the metrics in that zone moving beyond their mini-Budget/LDI crisis highs for the first time.

• Local headline flow has seen Halifax house price data lodge the most sizable decline since ’11, while rounds of industrial action continue to be flagged in the UK.
• The SONIA strip sees 0.5-8.5bp of richening, with the back end of the whites and front of the reds outperforming.
• BoE-dated OIS is little changed to 7bp softer in early trade, with terminal rate pricing hovering a little above 6.50%. edging away from yesterday’s hawkish extremes, lending support to short-dated Gilts.
• Comments from BoE MPC hawk Mann headline the domestic docket today.
• We also take this chance to re-flag our policy team’s latest BoE piece, which noted that “renewed calls for the BoE to publish regular rate projections of either the collective MPC or individual MPC members are facing ingrained opposition at the top of the Bank” (click for full release).