Softer Alongside Wider Core Global FI, Ratings Updates Looked Through

Gilt futures follow core global FI markets lower to start the week, with a lack of meaningful escalation in the Israel-Hamas conflict and BoJ speculation front and centre.

• That leaves futures -45 after gapping lower, but the contract is within the confines of the ranges seen at the tail end of last week, leaving familiar technical parameters in play.
• Cash gilt yields are 2.5-4.5bp higher, with 10s coming under the most pressure.
• S&P affirmed the UK at AA; Outlook stable after hours on Friday, while Moody’s moved the UK to outlook stable from negative alongside affirming its Aa3 rating. The latter won’t be a market mover and comes as the rating agency believes that “policy predictability has been restored after heightened volatility last year around the mini-budget.”
• Elsewhere, domestic headline flow remained centred on politics.
• SONIA futures generally sit just above session lows, running flat to -6.0 through the blues, steepening.
• BoE-dated OIS remain little changed to ~2bp firmer, also steepening a touch.
• The UK docket is essentially empty today, save BoE sales of long dated gilts.