GILTS: A Little Lower Following Jobs Data

Gilt futures back below 100.00 at the open, with core global FI markets on the defensive.

• Technicals remain bullish. Initial levels of note: Yesterday’s low (99.29) & Sep 6 high (100.60).
• Yields 2-3bp higher.
• Little to move the needle for the BoE in the latest labour market data. Click for our initial reaction to the release.
• We will provide the usual post-data review in due course.
• A reminder that the BoE has deemphasised the labour market data (in isolation) in recent months, focusing on a more overarching view of inflation persistence.
• SONIA futures flat to -4.0, BoE-dated OIS still showing ~44bp of cuts through year-end.
• Fiscal policy speculation continues to generate headlines, with the Resolution Foundation pointing to the potential for over GBP20bn of additional tax receipts from reforms to inheritance, pension and capital gains taxation.
• Looking ahead, GDP data is due tomorrow, while the latest BoE/Ipsos inflation attitudes survey will cross Friday.
• Elsewhere, the DMO announced that it will sell GBP2bln of the 0.125% Jan-26 Gilt (ISIN: GB00hBL68HJ26) via tender on Thursday after yesterday’s consultation.
• 0.625% Mar-45 I/L supply is due today.