Futures A Little Below Late Tuesday Levels, Curve Bear Flattens

Gilt futures show lower alongside global peers, last -40 or so. Yesterday’s base has not been tested.

• Cash gilt yields are 2-6bp higher, with the curve bear flattening.
• Lower tier local data has been bond-supportive at the margin, with Kantar grocery price inflation in the four weeks ahead of Christmas slowing to +6.7% in Y/Y terms. Although this level is still elevated, it represents the most moderate rate of inflation witnessed since April ’22.
• Elsewhere, the Institute of Directors' economic confidence index fall to -28 from -21. The director of policy at the IoD suggested that “an early cut in interest rates would be justified in terms of helping to kick-start business confidence.”
• SONIA futures are flat to -7.0 through the blues, with the reds leading the weakness.
• BoE-dated OUS is little changed to 3bp firmer through ’24 MPC meetings.
• A quick reminder that the UK docket is essentially empty for the remainder of the day, which will leave focus on cross-market flow and broader IG issuance.