Little Changed, European CPIs Cap Rally

Little reaction to overnight UK headline flow for gilts, with national CPI readings from Europe front and centre so far.

• •French and Spanish CPI data was in generally line to a touch firmer than expected, limiting any rallies in bonds.
• •Gilt futures +1 at 97.57 (97.51-83 range), with technical levels untouched/intact.
• •The bearish technical theme remains in place in that contract.
• •Gilt yields are unchanged across the curve.
• •Speculation re: the Budget remains evident, with suggestions that Chancellor Hunt may remove 'non-dom' tax benefits.
• •Such a move is part of an apparent list of fiscal options, although FT sources believe Hunt would only act if “official fiscal forecasts deteriorated over the next few days and further limited his room for Budget tax cuts.”
• •SONIA futures are flat to +1.0 through the blues.
• •BoE-dated OIS shows ~60bp of ’24 cuts, little changed on the day.
• •Wednesday comments from BoE’s Mann had little to no impact, as she stuck to her hawkish view.
• •Money supply and spending data headlines a limited local calendar on Thursday but shouldn’t move markets.
• •Final manufacturing PMI and comments from BoE chief economist Pill are due tomorrow.