Mixed, Off Best Levels

Little to add to earlier commentary, with gilts operating off session lows in yield terms after the early bullish momentum surrounding overnight headline flow and technical breaks faded.

• Cash gilt yields are now 2.5bp higher to 3.5bp lower on the day, with the curve twist flattening.
• Futures did fade back below the October high after running out of steam ahead of 96.00, but last show ~25 ticks higher on the day, just above 95.70.
• A light bid in the long end of the U.S. Tsy curve seems to have provided spill over support in recent trade.
• Gilt bulls eye the September lows in 10+-Year yields, while the previously covered technical resistance points of interest (96.05 & 96.14) presents the most immediate points of note on the futures side (beyond 96.00).
• SONIA futures are now softer across the curve, running 0.25-2.5bp weaker on the day through the blues, more than reversing the early rally.
• Comments from BoE Governor Bailey were a little less dovish than some other recent MPC communique, which probably helped apply some pressure at the margins. BoE-dated OIS now sits little changed to ~4bp firmer on the day, also more than reversing the early dovish swing.
• The moves in the front end will factor into the twist flattening of the strip.