Curve A Little Flatter, Yields Off Session Highs In Fairly Contained Trade

Gilt traders have seemingly been happy to track the ebb and flow of wider core global FI markets early today.

• Headline flow has been light since London trade got underway, with much of the Asia-Pac focus falling on the dovish tinge (at least vs. wider market expectations) in the latest address from a BoJ Deputy Governor and a softer-than-expected round of Chinese CPI data, before the modest richening impulse quickly faded from most of the wider core global FI markets.
• Domestic news flow has not been market moving.
• The initial London move lower in futures/higher in yields has faded from extremes.
• Gilt futures sit -13 as a result, with the contract in the middle of its early 40-tick session range. Initial technical parameters on either side of current levels remain untouched.
• Cash gilt yields are 1bp higher to 2bp lower as the curve twist flattens.
• 2s10s continues to coil in a tight range (at least this week), while 5s30s flattens to fresh ’24 extremes.
• STIR markets are pretty much in line with pre-gilt open levels. SONIA futures sit flat to 4.5 lower through the blues, while BoE-dated OIS shows ~84bp of cuts through ’24.
• Comments from BoE hawk Mann (15:00 London) headline the local docket today.