Still Watching Wider Themes

Gilts have generally stuck to the broader tone witnessed across core global FI markets thus far. The opening downtick was never completely pared, although early lows haven’t been challenged during the second round of modest Monday pressure for the space.

• That leaves futures running -20, 15 ticks off the low if their ~45 tick range and sticking within Friday’s boundaries.
• Cash gilt yields are 2.5-5.0bp higher, with the curve bear flattening, leaving 2s10s and 5s30s off last week’s multi-week highs.
• SONIA futures run little changed to 6bp softer, with the reds and greens seeing the most pressure. Contracts there are at/just off worst levels of the day.
• BoE-dated OIS contracts run little changed to ~4.5bp firmer on the day, with some of last week’s late dovish move (largely driven by cross-market reaction) unwound. That leaves ~70bp of cuts priced for ’24 on the whole.
• Comments from BoE dove Dhingra headline the domestic docket today. She will speak at the 'Ending stagnation' conference later this morning (11:30 London).
• The BoE will also conduct APF sales covering gilts in the long maturity bucket this afternoon.