Yesterday’s High In Futures Breached, Curve Flattens

Gilts shunt higher alongside wider core global FI markets, with yesterday’s high in futures breached.

• Missile fire from Lebanon towards Israel helps promote the bid.
• The contract last shows +75, with bulls now eying 94.74, the Sep 28 high, as they look to establish themselves in a more meaningful manner on a technical basis.
• Cash gilts run 1.5-5.5bp richer, flattening, with both the 2s10s and 5s30s working away from highs seen in recent sessions.
• SONIA futures show 0.5-8.0bp richer through the blues, also flattening.
• Overnight REC/KPMG labour market data revealed that starting salaries and pay for temporary workers saw the slowest increase in two and a half years during September, while a swifter rate of job cuts was also flagged in the survey. This is the latest sign of a cooling domestic labour market.