Off Early Highs, Curve Flattens

As mentioned elsewhere, the softer than expected run of domestic manufacturing data for the month of August helped bias gilt futures higher at the open, before a move back from best levels alongside wider core global FI.

• The contract last shows -10 or so, with bears closing the opening gap higher.
• Technical resistance at the Sep 26 high (95.67) capped the early rally.
• Cash gilts bear flatten on the day, last showing 5bp cheaper to flat.
• Outside of the data, familiar dovish commentary from BoE’s Dhingra crossed overnight (as we have covered elsewhere).
• SONIA futures see light twist flattening on the day, running 2bp cheaper to 2bp richer, off of pre-gilt open session bests as gilts cheapen.
• Locally, comments from BoE’s Pill & the release of the Bank’s credit conditions data will cross today, Further afield, U.S. CPI data provides the major macro risk event.