Early gilt weakness extends as Bunds sell off on the regional German CPI data.

• Bears threaten initial support in futures, testing Friday’s low (98.31).
• Yields ~4bp higher across the curve in a parallel shift.
• 10-Year Gilt/Bund initially widened beyond last week’s multi-year closing high, seemingly driven by views linked to last week’s dovish ECB repricing.
• The subsequent Bund weakness then pushed the spread back below 185bp, little changed on the day.
• Goldman recommend short 10s on the 2s10s30s fly, while J.P.Morgan issued a long 5s recommendation late Friday.
• BoE-dated OIS also moved in sympathy with EUR peers.
• 23.5bp of cuts now priced for Nov, 36.5bp of cuts price through year-end and 118bp of cuts priced through June ’25. That compares to 24.5bp, 39bp and 126bp early today.
• SONIA futures 0.5-6.5bp lower, at session lows across the strip.
• Today will bring another round of comments from BoE's Greene (21:10, well after market close), although greater focus is likely to fall on Friday comments from BoE chief economist Pill.
• GBP800mln of short-dated BoE APF sales also due today.
• Spill over may come from comments made by ECB President Lagarde (14:00 London), while Fed Chair Powell will speak after the gilt close (18:55 London).