Lower Post-PMIs, Mixed Inflation Inputs Limit Hawkish Move

Fresh lows for futures on the firmer-than-expected domestic PMI data.

• Contract trades as low as 99.83, support at the 20-day EMA (99.59) untested.
• Yields 2-3p higher across the curve, light bear steepening seen.
• 2s10s and 5s30s still comfortably below August highs.
• SONIA futures flat to -2.0, BoE-dated OIS shows ~41bp of cuts through Dec vs. ~43bp pre-data.
• The survey provided mixed inputs for BoE policy, limiting hawkish reaction.
• The surveys suggested that services price inflation is moving lower. Although some MPC members will be concerned that core goods prices look to be picking up earlier than previously expected.