Curve Twist Steepens, Belly Long End Wider Vs. European Peers

Gilt futures still lag global peers, showing around unchanged levels, as 5+-Year Gilts continue to hold wider on the day vs. core European peers. Outright cash trade sees 6bp of richening to 0.5bp of cheapening, as the curve twist steepens.

• Pre-BoE setup and cross-market influences are still eyed, with 34bp of tightening for tomorrow’s decision priced into BoE-dated OIS, in line with early morning pricing.
• Positioning wise, Gilt futures have seen a move into long territory in the past couple of weeks. This contrasts with the contract's short territory status through most of June.