Firmer Alongside Core Peers

Gilts lean on the core global FI bid flagged elsewhere at the open, with futures pushing through highs seen over the last couple of sessions, before backing off from best levels.

• The contract last shows +45 or so at 97.04, ~25 off the top of the early ~35 tick range.
• 97.93 presents the next meaningful upside target, representing the Nov 22/29 highs.
• Yields are 5.0-6.5bp lower across the curve, with the wings lagging at the margins.
• SONIA futures are flat to +7.0, with the reds still leading, albeit with the strip off best levels alongside gilts.
• BoE-dated OIS is little changed to 9bp softer through ’24 MPC contracts.
• Overnight, we saw the Citi/YouGov inflation expectations survey reveal no movement in the year ahead print (4.2%), although the longer run expectations release moved up to 3.5% from 3.3% in the month prior.
• That is the sort of movement in longer term inflation exp. that will keep the BoE on guard.
• BRC sales data showed a steady 2.6% Y/Y rise.
• Still, it has been wider market moves that have dominated thus far.
• Final services and composite PMI data headlines the domestic docket today.
• The DMO will sell GBP1.5bln of the 10-year 0.75% Nov-33 index-linked gilt.