Holding On To Post UK CPI Gains

Bunds and Gilts have held onto the majority of their post- UK CPI gains, with few additional fundamental drivers to add since our last mid-morning update. Details of US PPI revisions have filtered through, but there has been limited impact on USTs let alone Eurozone/UK paper.

• Gilt futures are +50 at 97.51, with 97.50 providing a base for price action through the day. Yesterday's low (96.81) and high (97.95) remain the first support and resistance respectively. Bunds are +16 at 133.27.
• The Gilt curve continues to show a bull steepening dynamic, while the German cash curve sees yields -1 to -2bps lower on the day. Periphery spreads remain tighter to Bunds, with European equities higher on the day.
• STIR markets show similar dynamics to core FI, with SONIA +0.5 to +10.0 ticks and Euribor flat to +2.5 ticks through the blues. There are 69bps of BoE rate cuts priced through 2024 at typing (vs 72bps immediately post-CPI data), while ECB-dated OIS price 111bps of easing through this year - also largely unchanged over the last few hours.
• A reminder that BoE Governor Bailey testifies to the House of Lords Economic Affairs Committee today at 1500GMT. For the ECB, Executive Board member Cipollone speaks on the digital Euro at 1400GMT/1500CET. The Bundesbank's Nagel rounds off the day at 1700GMT/1800CET joining a panel discussion on "How will financing work in the future?".