Under Pressure In Early Pre-BoE Trade

Moves in wider core global FI markets weigh on gilts in early trade, with tepid demand at the latest 10-Year Tsy auction and some BoJ-related weakness for JGBs noted.

• Futures trade through yesterday’s low but remain comfortably with the range seen week to date, last -30 at 97.65 (lows of 97.60).
• Cash gilt yields are 2.5-3.0bp higher across the curve.
• SONIA futures come under some very light pressure after the gilt open, last 0.25-2.5 lower through the blues.
• Our full preview of the impending BoE decision can be found here.
• On Wednesday we suggested that a dovish BoE outcome probably presents the greatest risk to current market pricing, although the move away from recent hawkish extremes provides a little more balance to the risk profile heading into the decision (click for more).
• Overnight, the S&P-KPMG-REC Report on Jobs showed that the labour market continues to soften, albeit at a slower pace than in March.