Under Light Pressure To Start, Curve A Touch Steeper

Gilts trade lower early on, following cues from wider core global FI markets and BoE chief economist Pill, who once again highlighted the need to maintain restrictive policy settings for a sufficient period of time, particularly as inflation is “stubbornly high.”

• Futures last show -50 at or so at 95.44, representing the low of the early 27 tick range.
• The contract has breached yesterday’s low and the 20-day EMA (95.63). That exposes key short-term support at the Nov 13 low (94.58).
• Cash gilt yields are 1.5-3.5bp firmer, with a light steepening bias seen on the curve.
• SONIA futures sit flat to 4.5bp softer through the blues, with a steepening bias also seen there.
• BoE-dated OIS now shows flat to 2.5bp firmer through ’24 MPC contracts. Remaining within the boundaries set during yesterday’s PMI-inspired hawkish adjustment.
• Slightly firmer-than-expected (but still negative) GfK consumer confidence data and housing market worry gets some airtime via local media outlets, but the fiscal and issuance feedthrough from the Autumn Statement/DMO update is still garnering most of the focus.
• The domestic docket is essentially empty ahead of the weekend.