Softer & Flatter, Looking Elsewhere For Cues Still

Bulls threatened to close the small opening gap lower in gilt futures, before wider core global FI markets drifted lower again, leaving the contract -25. Early session lows remain intact.

• Cash benchmarks are 2-4bp cheaper as the curve flattens.
• Most swap spreads are a touch tighter on the session.
• As noted elsewhere, an uptick in U.S., European & UK equity futures is probably helping keep any buying in check, while U.S. rates seem to be making some room for hawkish comments from Fed Chair Powell later today (moves are relatively modest in the grander scheme of things).
• There hasn’t been much in the way of domestic news flow to digest, with China- & ECB-related headlines dominating thus far.
• SONIA futures sit flat to -4.5 through the blues.