Still A Little Firmer On The Day, But Shy Of Best Levels

Gilts initially benefitted from the dovish BoJ outcome (covered elsewhere) and the downtick in crude oil futures seen since yesterday’s UK market close.

• That was before bulls failed to break yesterday’s session high in futures and the latest round of 4.625% Jan-34 gilt supply provided mixed demand metrics (with a particular focus on the soft pricing side), which helped cap the rally.
• That leaves gilt futures running +35 or so around 101.65, ~20 ticks shy of early session highs and just above worst levels of the day.
• Cash gilt yields are ~2.5-3.0bp lower across the curve, with the early flattening bias giving way.
• Domestic headline flow has been relatively limited since the open.
• SONIA futures are flat to +6.0 through the blues, shy of best levels.
• BoE-dated OIS is +1bp to -2bp on the day, with ~116bp of cuts showing through ’24 on the whole.
• Lower tier local data and comments from BoE’s Breeden are due later today.
• A quick reminder that UK CPI data will hit ahead of tomorrow’s market open (expect our full preview of that release later today).