[MARKET ANALYSIS] Gilts lead on pre-budget reports and post-Pill, USTs await CPI

Pre-event holding patterns ahead of a US CPI print are a familiar rhythm: curves drift within narrow confines, short ends lead on any directional bias, and the prior data surprise, here the soft payrolls, defines the asymmetry into the release. The established sequence is that a confirmatory cool print extends the existing repricing of the policy path while a hot one unwinds it faster, since positioning is already leaning the dovish way. The gilt outperformance is the more idiosyncratic story: reports that fiscal expansion is funded through tax and spending rather than borrowing ease the supply and credibility premium that has episodically punished UK duration after fiscal events, and pushback from a known hawk on the extent of hike pricing carries more signalling weight than the same words from a dove, though pragmatic data-dependency language rather than a full reassessment limits how far it runs. On the continent, the OAT-Bund spread remains the live barometer of French fiscal and political friction, and episodes of budget-contribution disputes have historically widened it in steps rather than trends; BTP-Bund tends to trade as a lower-beta expression of the same peripheral risk appetite. The follow-ons are the CPI print itself, any corroborating or dissenting commentary from other officials on both sides of the Atlantic, and whether pre-budget reporting hardens into confirmed measures, since gilt relief premia built on leaks have reversed on the published detail before.