EUROPEAN FIXED INCOME UPDATE: bonds bid and curves flatter on balance

Analysis details (11:21)

Not much payback for Gilts or the Sonia strip following considerably better then forecast CBI distributive trades for May, and the lack of reaction could be down to the fact that the quarterly business situation deteriorated to worst levels seen since November 2020. Moreover, markets are still digesting the unexpected weakness in UK PMIs and the severe services sector slowdown, as the 10 year debt future retains the bulk of its best gains (87 ticks at the 118.86 Liffe high) and STIR contracts hold 5.5-11 ticks above prior closing levels within a -1.5/+16 tick range. Elsewhere, Bunds are off their 153.52 recovery peak (+41 ticks vs -7 ticks post-ECB President Lagarde), but doing better than Italian BTPs as books build for the 15 year syndication, and the T-note is just shy of 120-00 between 120-02+/119-18 overnight parameters with the curve flatter ahead of 2 year issuance, the US flash PMIs, ISM semi-annual projections and Fed chair Powell.  

24 May 2022 - 11:21- Fixed IncomeResearch Sheet- Source: Newsquawk