Curve Twist Flattens, Futures Back To Flat

In line with expected and flash final Services PMI data out of the UK does little for the space after a light bid derived from this morning's final Eurozone Services PMI and a downtick in short-term inflation expectations in the latest ECB consumer survey provided some support. That leaves Gilts running 1.5bp cheaper to 0.5bp richer as the curve twist flattens, while futures are back above 95.00 to sit little changed on the day, shy of post-data bests.

• The SONIA strip still twist steepens, running 0.5bp richer to 4.5bp cheaper, pivoting in the back end of the whites, while BoE-dated OIS sees terminal rate pricing showing just above 6.35%, which is keeping the front end of the Gilt curve in check.
• Broader inputs will be eyed once the incoming '25 Gilt auction is out of the way, with nothing in the way of meaningful domestic risk events slated.