REFINING: Ukraine Claimed Another Drone Strike on Russia's Ryazan Refinery

Gilts follow peers lower at the open, with a soft start to this week’s U.S. Tsy issuance and a move away from Tuesday lows in crude oil futures eyed.

• Note the European and U.S. issuance (detailed earlier) is due today and may be providing some weight this morning.
• Futures through yesterday’s low but within this week’s range.
• Lows of 92.36 seen so far.
• Bears will look to force a break of Monday’s low (92.24) to expose the 20-day EMA (91.86), as they look to quell some of the recent bullish momentum. Initial resistance at yesterday’s high (92.84).
• Yields 1.5-3.0bp higher, curve bear steepens.
• 2s10s back above 70bp after the first close below since early July, while 5s30s remains pinned around 140bp.
• GBP STIRs a little more hawkish than pre-gilt open levels, SONIA futures flat to -3.5. BoE-dated OIS still showing ~48bp of easing through year-end, with over 90% odds of a cut priced for tomorrow.
• NIESR comments underscored UK fiscal worry and an in line with market pricing view of future BoE policy moves (detailed in our early morning STIR bullet).
• Little of note on the UK calendar today.

• MNI: EUROZONE JUL FINAL CONSTRUCTION PMI 44.7 (45.2 JUNE)

NIER Forecast Changes below. Diff columns represent changes relative to the June forecast round. 

Source: NIER. Note: Percentage change and percentage points unless otherwise stated