Outperformance vs. Peers Remains Evident, Curve Now Twists Steeper On The Day

Gilts remain the most resolute within core global FI markets today, given the previously covered BRC shop price metrics released overnight, but the wider weakness observed in bonds has applied pressure to UK paper as the day wears on.

• That leaves the major metrics comfortably off best levels of the day, with cash benchmarks running 4bp richer to 2bp cheaper.
• The curve twist steepens, pivoting around 7s.
• The presence of long dated green gilt supply and only average reception of the auction has helped with the curve steepening through the entirety of today’s session.
• Gilt futures are -30 on the day, with yesterday’s base breached and the technical downtrend intact.
• To the downside, the 4.60% yield equivalent in futures sits at 92.28 today, while round number support is seen at 92.00.
• The SONIA strip now twist steepens on the day, with the front end supported by the feedthrough from the BRC shop price data.