Curve Twists Steeper

Long end Gilts follow core global FI markets cheaper at the open, with BoJ matters front and centre, before futures find a base without testing 95.00. The contract last runs -50 or so, ~40 ticks off worst levels of the day, while cash trade sees the major benchmarks running 1bp richer to 6bp cheaper as the curve twist steepens.

• The SONIA strip runs 5.5bp richer to 7.0bp cheaper, twist steepening with a pivot seen at the back end of the greens.
• BoE-dated OIS softens a touch, leaving ~34bp of tightening showing for next week’s decision, while terminal policy rate pricing edges back below 5.90%.
• German CPI readings and the latest round of data out of the U.S. provide the highlights of the macro docket, with little of note scheduled domestically ahead of the weekend. Participants will also be on the lookout for sporadic and scheduled central bank speak from other shores, with several ECB Governing Council members already providing off-schedule post-meeting comments.