Stabilising Alongside Broader Core Global FI, Early Cross-Market Widening Holds

Gilts also find a bit of a base alongside wider core global FI markets, but still sit wider vs. U.S. Tsys and Bunds across the curve.

• Futures last -50, while cash benchmarks are 3-5bp cheaper as the curve bear steepens.
• Offshore matters have generally dominated thus far (cross-market moves and BoJ hawkishness).
• As we flagged earlier, DMO confirmation that it plans to auction the 1.125% ‘73 gilt on Wednesday 27 September (after last week’s consultation) will have aided the steepening bias at the margin.
• SONIA futures are also off lows, last 0.5-5.5bp cheaper through the blues, with reds leading the weakness.
• BoE-dated OIS firms and steepens given global core FI moves, showing 22bp of tightening for this month’s meeting, while terminal policy rate pricing is a little over 5.65%.
• Note that BoE’s Pill was previously scheduled to give an address today, but that event was cancelled last week.
• That leaves BoE QT sales of the short maturity bucket as the only point of note on the local docket today.
• Domestic focus is on the release of the monthly labour market report, scheduled for tomorrow.