Lower On PMIs, STR Usage Now Eyed

Gilts are lower, firmer-than-expected domestic PMIs and Eurozone services PMI weighs.

• Futures trade as low as 99.81, support at the 20-day EMA (99.59) remains untested.
• Yields 2-3bp higher across the curve, light bear steepening.
• SONIA futures flat to -2.5.
• BoE-dated OIS shows ~41bp of cuts through year end vs. 42bp pre-data.
• PMI inflation components were mixed, limiting the hawkish reaction.
• BoE short-term repo usage eyed (due ~10:40), with more frequent discussions questioning the ‘ampleness’ of bank reserves noted, despite levels being comfortably above the BoE’s PMRR.
• Further out, U.S. matters are set to dictate through the afternoon, while BoE Governor Bailey will speak from Jackson Hole on Friday.