Global Inputs Weigh

Spill over from yesterday’s weak U.S. Tsy auctions & firmer-than-expected Australian CPI data apply pressure to gilts at the open, with support at 96.26 breached as the contract moves to 96.22, extending the recent bearish price action.

• Round number support comes in at 96.00, with the May 1 low located a little below there (95.87).
• Gilt yields are 3-4bp higher across the curve.
• SONIA futures sit at/a touch below pre-gilt open levels, last 0.25-6.5bp lower.
• UK headline flow remains centred on politics, with Labour looking to promote confidence in its ability to provide a steady pair of hands if the party is victorious at the July 4 election.
• There isn’t any meaningful UK data of note scheduled for today, which will leave much of the focus on macro headline flow and European data.
• On the supply front, GBP1bn of 0.125% Mar-39 I/L supply is due.