Cheaper & Steeper To Start

The weakness seen in the long end of the JGB curve, as well as a recent tick lower for EGBs, has spilled into gilts, with futures through yesterday’s low, although the contract remains comfortably within the confines of Wednesday’s range.

• It last prints -55 around 98.10, ~15 off the lows of an early ~55 tick range.
• Cash gilt yields run 3.0-6.5bp higher on the day, as the curve steepens.
• Familiar technical parameters remain intact/untouched.
• SONIA futures are biased lower as a result, with those contracts running flat to 5.0bp softer through the blues, as some steepening is seen.
• BoE-dated OIS is little changed to 2bp firmer through ’24 MPC contracts.
• An FT piece flagged comments from the OBR chief. He noted that the UK’s reliance on “fickle and flighty” foreign buyers of its government debt is a growing risk to the stability of the gilt market. While the idea of the ‘kindness of strangers’ is not a new one, it remains one of note.
• The latest KPMG-REC labour market survey continued to point to moderating wage growth (3-year low registered in the relevant survey sub-metric in November) and a slowdown in hiring.
• The BoE-Ipsos inflation attitudes survey headlines today’s limited domestic docket