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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.
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