Weaker Alongside Wider Core Global FI

The aforementioned weakness in broader core global FI markets helps bias gilts lower.

• Futures show -85 at 101.80, 6 ticks off lows.
• Technically, the uptrend in gilt futures remains intact. The contract traded to a fresh trend high on Wednesday last week, reinforcing bullish conditions. The latest pullback is considered corrective and meaningful support to watch is 100.20, the Dec 13 high. A resumption of gains would open 104.00.
• Cash gilt yields see a fairly parallel 9bp shift higher across the curve.
• SONIA futures are flat to -4.5 through the blues, with a steepening bias seen. Contracts generally operate off early session lows.
• BoE-dated OIS is little changed to ~3bp firmer on the day but also operates off hawkish session extremes.
• As noted elsewhere, political posturing, along with speculation surrounding fiscal loosening and election timing, continue to do the rounds in the local press.
• We also saw a steady Y/Y reading in the BRC shop price index, more details are available in our pre-gilt open STIR comment.
• Final manufacturing PMI data headlines the UK docket today.