Digestion Of Private Sector Wage Data Allows Early Pressure To More than Reverse

Gilts have edged away from best levels of the day.

• Futures last show +35 or so, ~10 ticks shy of the peak of their ~60 tick session range.
• Cash gilt yields are 1.5-3.5bp lower across the curve, with a flattening bias maintained throughout most of today’s session.
• SONIA futures are unchanged to 4.5bp firmer through the blues, flattening, while BoE-dated OIS is little changed to 2bp softer on the day.
• Early two-way flow in both gilts and SONIA seemed to be a product of digestion of the wage components in the latest domestic labour market report.
• Headline AWE growth including bonus payments comfortably topped median expectations but still slowed vs. August. The reading was also skewed by one-off public sector bonuses. Meanwhile, earnings covering the private sector but excluding bonus payments (which is seen as more integral for BoE policy) hit the lowest growth rate seen since April (albeit remaining elevated at 7.8%).
• BoE speak from dove Dhingra and chief economist Pill headline the domestic docket through the remainder of the day.