Underperforming Counterparts

Gilts are the underperformer in the time since our previous updates, with futures having a shallow look below their early session lows before ticking away from worst levels.

• Gilt futures -80, while the cash benchmarks are 3-6bp cheaper, with 10s leading the weakness.
• A meaningful show below existing session lows would bring the mini-Budget lows more into focus (90.38), with only a Fibonacci projection (90.70) providing technical support ahead of there.
• 10-Year Gilts see more weakness on the day than all of their major global counterparts as of typing, with no real headline flow to drive the spread widening.
• SONIA futures run +0.25 to -12.0 through the blues, generally sitting just off worst levels, as the curve twist steepens.
• BoE-dated OIS also twist steepens on the day.