SONIA Flat To A Touch Firmer With Core FI Off Thursday Lows

SONIA futures sit flat to 1.5bp firmer on the day.

• Late Thursday buying, which most attributed to month-end index extension type flow in Tsys, leaves benchmark Bunds and TY futures in line to a touch above levels seen at yesterday’s SONIA settlement window.
• Note that gilts were heavy into yesterday’s close, after the early run of spread widening on Thursday. A quick reminder that we didn’t see much in the way of major news flow to spur the early Thursday widening in gilts vs. core peers.
• Typically hawkish comments were seen from BoE dissenter Greene a couple of hours ahead of the SONIA close, but they didn’t have an immediate meaningful impact.
• SONIA futures ticked lower alongside gilts into the close, but have firmed again early today, given the move in benchmark bonds.
• Final manufacturing PMI data headlines a relatively limited domestic docket today.
• Note that the Nationwide house price index wasn’t quite as soft as expected in Y/Y terms, with an unexpected uptick seen in M/M terms.