Cross-Market Outperformance Remains, Fiscal Headlines Continue To Circulate

Gilts continue to outperform core global FI peers, with limited gyrations derived from cross-market impulses in more recent dealing.

• Futures consolidate shy of best levels, last showing +55.
• Cash benchmarks are 1.0-5.5bp richer, bull steepening.
• Post-labour market data dovish BoE repricing has moved off extremes, with the strip last running flat to ~3.5bp softer.
• SONIA futures are flat to 8.5bp richer, with the greens/blues leading.
• On the fiscal front, we note that BBG sources have suggested that “the UK government is considering an adjustment to the way that it calculates an annual increase in state pension payments, in a move that could save taxpayers up to £1bn.”
• This comes after a spokesperson for PM Sunak noted that the government is committed to the triple lock mechanism. A reminder that Sunak failed to commit to keeping the lock in the next Conservative Party manifesto over the weekend.