Lagging The Broader Bid Post-Haskel & Ahead Of Mann

The early Gilt cheapening, which outstripped that seen across wider core global FI markets, aided by the latest rounds of rhetoric from BoE’s Haskel, still hasn’t fully has unwound, even with core global FI markets now richer on the session. That leaves the major cash benchmarks running 2.5-3.5bp cheaper, with a modest bear flattening impulse evident. Gilt futures are -25 on the day, with recent lows in Gilt futures and highs in benchmark yields unchallenged during the early cheapening.

• That suggests that the lingering impact of sticky UK inflation/wage dynamics and related BoE worry remains at the fore ahead of this afternoon’s comments from BoE arch-hawk Mann.
• BoE-dated OIS continues to indicate a terminal policy rate of just over 5.50%, albeit a little shy of this morning’s best levels owing to the moves in bonds and oil.
• Similarly, SONIA futures have retraced from session extremes, last running little changed to 5bp cheaper.
• For more on this week’s BoE speak and gilt supply see our latest Gilt Week ahead release here.