September 11, 2023 07:43 GMT
Steeper & Cheaper To Start
Gilt futures gap lower at the open, with the move then extending as Friday’s low gives way and the pullback from levels just ahead of 95.00 extends.
- Futures last -55, cash benchmarks last 4.5-5.5bp cheaper, with a modest steepening bias on the back of broader impetus in the wake of hawkish weekend comments from the BoJ Governor and after the DMO confirmed that it plans to auction the 1.125% ‘73 gilt on Wednesday 27 September (after last week’s consultation).
- Local weekend headline flow saw BBG note that “Prime Minister Rishi Sunak is facing a backlash within the Conservative Party as his government weighs letting welfare benefits slip to create room for tax cuts,” although those matters will likely become more of an issue for markets as we move towards the next general election.
- Note that BoE’s Pill was previously scheduled to give an address today, but that event seems to have been cancelled as of 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.