Firmer Start, PMIs Eyed

Gilt futures trade higher alongside peers, but don’t test yesterday’s high (99.00) and more meaningful resistance just above (99.05), last +22 at 98.92.

• Cash gilt yields are 1.5-3.0bp lower across the curve, light flattening seen.
• Most of yesterday’s post-BoE dovish adjustment has stuck in the short end, with focus on the confirmation that yesterday’s decision was “finely balanced” for some MPC members remaining evident.
• Slightly lower-than-expected PSNB data (coupled with lower revisions) is gilt supportive, at the margin.
• Little lasting impact when it comes to the firmer-than-expected UK retail sales print. The volatile data series isn’t expected to impact monetary policy.
• Elsewhere, the GfK consumer confidence index moved to the highest level seen in around two and a half years, although remains in negative territory. There may be an element of election-linked hope in the latest uptick The release shouldn’t be a market mover.
• Flash PMI data headlines the UK calendar during the remainder of the day.