Marginally Firmer To Start

Gilt futures firm at the open, in sync with wider core global FI markets around the turn of the hour, with the contract a little above the middle of yesterday’s range, +18. Cash gilts run flat to 1bp richer, with a light bull steepening impulse apparent.

• SONIA futures are flat to 3.5bp firmer through the whites, with the back end of the whites and front end of the reds leading the bid, while BoE-dated OIS sees terminal rate pricing come in by ~%5bp, last showing just above 5.45%.
• Local news flow has been fairly limited. Barclays card spending data continued to point to high levels of inflation, most notably in food prices, eroding consumer spending power, with similar takeaways derived from the latest BRC like-for-like sales print, which saw growth hit a multi-month low, resulting in a much softer than expected outcome.
• As we noted in our Gilt Week Ahead (click here for full publication: https://roar-assets-auto.rbl.ms/files/53308/GiltWeekAhead20230605.pdf), the DMO will kick off gilt issuance for June today, with GBP2.5bln of the 30-year 3.75% Oct-53 gilt on offer.