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Modest hawkish moves in GBP STIRs this morning as bonds soften.

• BoE-dated OIS flat to 1.5bp more hawkish across the curve, showing 14.5bp of cuts for May, 17bp through June, 26bp through August and 42bp through December.
• A close at current levels for December MPC pricing would be the most hawkish close seen since late January.
• We, as well as the wider sell-side consensus, still look for the next cut to come in May.
• SONIA futures flat to -1.5 last.
• The combination of hawkish Fed rhetoric, a bid in oil and an early uptick in European equities (seemingly on increased hope for U.S. tariff reprieve) weighs on bonds.
• Late Monday comments from BoE Governor Bailey stayed away from monetary policy and focused on the weakness of productivity growth as well as labour supply issues.
• An FT story provided the latest fiscal colour ahead of tomorrow’s Spring Statement, essentially confirming the erosion of the fiscal headroom outlined in the Autumn Budget, while pointing to more than GBP5bln of further spending cuts.
• The piece also suggested that the OBR forecast for UK economic growth in ’25 will be halved to ~1%.
• Little of note on the UK calendar until tomorrow’s CPI & fiscal event risk, which will leave focus on cross-market & macro matters for much of the session.

• As noted in the Bund opening comment, some focus on the price action in the US Tnotes, and the immediate support of 110.12+.
• There's some pick up in Volumes to the downside, Bobl is sold in over 6k, and Tnotes another 15k in the past 5 minutes or so.
• Early focus in Europe will be on supply.

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