Gilts Lead Global Rout

Global core FI has sold off relentlessly in European morning trade Thursday in a continuation of the recent "higher-for-longer" bearish price action, with Gilts leading the way lower in a steepening move.

• UK yields are up double-digits across most of the curve, and rates markets are beginning to re-price another full 25bp hike from the BoE in this cycle. MNI's event with BoE's Hauser has just gotten underway; we hear from the MPC's Greene later.
• Bund yields have hit fresh post-2011 highs and 10Ys starting to eye the 3% mark amid heavy futures trading volumes.
• The highlight of the schedule coming into the session was Spanish and German preliminary September inflation, which has come in line if not a touch below expectations, but that's done little to stem the broader bond rout.
• Periphery spreads are a little wider, led by BTPS (10Y/Bund up 2+bp).
• The Tsy curve is also bear steepening but yield moves have been relatively modest, with yields up 1-3bp through 10Y but 30s up 4bp.
• On the US data docket, Initial jobless claims and final Q2 GDP (including historic comprehensive revisions), with Fed speakers including Goolsbee, Cook, and Powell. $37B in 7Y supply is coming up as well.

Latest levels:

• Dec US 10Y futures (TY) down 1.5/32 at 107-17 (L: 107-15.5 / H: 107-27)
• Dec Bund futures (RX) down 94 ticks at 127.70 (L: 127.60 / H: 128.59)
• Dec Gilt futures (G) down 143 ticks at 93.47 (L: 93.43 / H: 94.74)
• Italy / German 10-Yr spread 1.8bps wider at 196.4bps