Light Bid To Start, BoE DMP Eyed

The light bid off lows in Bund futures helps UK paper to firm at the open.

• Cash benchmarks are 2-3bp richer on the day, with a light steepening bias noted.
• Gilt futures are +20 or so on the day. Technically, this week’s slide has resulted in a break of support at 94.14, the Aug 29 low. The breach undermines the recent bullish theme and highlights potential for a deeper retracement with next support at 93.12, a Fibonacci retracement. On the upside, key short-term resistance is 95.79, the Sep 1 high. Clearance of this would reinstate a bullish theme.
• Local headline flow has seen softer than expected Halifax house price data, with worry re: the sector well-documented.
• SONIA futures are flat to 6bp richer through the blues, with the reds leading the bid.
• BoE-dated OIS runs little changed to 3.5bp softer, as the direction of travel witnessed yesterday afternoon continues. ~22bp of tightening showing for this month’s gathering, while terminal policy rate pricing shows around 5.75%.
• The release of the latest round of BoE decision maker panel survey data provides the highlight of today’s local docket.