Indecisive Start

Gilts search for a clear sense of direction in early London trade, with wider core global FI cheapening a little in recent dealing. That leaves the futures contract +6, after showing either side of late Tuesday levels. Cash trade sees the major benchmarks print 0.5-1.0bp cheaper.

• SONIA futures are flat to 2bp richer, with some light bull flattening apparent on the strip.
• BoE-dated OIS sees some light twist steepening vs. yesterday’s closing levels, with terminal policy rate pricing still hovering just below 5.50%.
• Domestic headline flow has been driven by UK International relations, which shouldn’t be much of a market mover.
• The latest Halifax house price index reading revealed the first Y/Y drop seen in the series since 2012.
• There isn’t anything in the way of domestic data releases of note slated for the remainder of the day.
• On the supply front, the DMO will return to the market with GBP4.0bln of the 2.5-year 3.50% Oct-25 gilt on offer (see our Gilt Week Ahead document for more on that front).