Softer Alongside Peers, Awaiting Syndication Opening

Wider post-BoJ impetus identified elsewhere helps bias gilts lower alongside wider core global FI peers.

• Futures last show -30 at 98.90, 19 ticks off the base of the early 23-tick range.
• Cash gilt yields are ~0.5-1.5bp higher across the curve, bear flattening at the margin.
• SONIA futures flat to 2.0 through the blues, moving off lows alongside gilts.
• BoE-dated OIS is little changed vs. pre-gilt open levels (see earlier bullet for more granular detail there), showing ~106bp of cuts for ’24.
• We remain on the lookout for the opening of the syndication of the new 30-year 4.375% gilt. We have earmarked today as the most likely staging post for that event.
• Local news flow has seen the latest round of monthly public finance data hit. The ONS noted that December saw a "stronger growth in central government tax receipts than we've seen in the most recent months." This at first glance seems to be a much lower borrowing number than had been expected - and those tax receipts are one of the drivers.
• This gives Chancellor Hunt greater fiscal headroom ahead of the Budget, with expectations growing re: fiscal loosening/tax cuts.
• When it comes to feedthrough from looser fiscal policy/tax cuts BBG have flagged documents from ’22, which saw the UK Treasury tell PM Sunak that tax cuts would have low impact on growth. We also highlight lower-than-usual support for tax cuts vs. the level of public service provisions via opinion polling of the broader British public.