EUROPEAN FIXED UPDATE: Bunds & Gilts pressured in thin trade, USTs flat into data

USTs: -3 ticks, 108-28

• Contained trade in narrow ranges with catalysts light so far. A very slight bearish-bias in play as the US risk tone is robust following the nation avoiding a gov’t shutdown.
• Docket ahead features US Consumer Confidence and Durable Goods.
• As it stands, in a narrow 108-27+ to 109-00+ band which is entirely within Friday’s 108-19+ to 109-08+ parameters.

Bunds: -37 ticks, 133.76

• Came under modest pressure early doors and remains the fixed income underperformer. Pressure which occurred in limited trade with volumes very light and as such is perhaps not worth reading extensively into, though a hotter than expected set of import data likely influenced.
• At the low-end of a 133.72 to 134.06 band, dipping below Friday’s base and matching last week's trough.
• Docket ahead is very light, overnight we saw remarks from a handful of ECB speakers though nothing which has fundamentally changed the narrative.

Gilts: -35 ticks, 92.58

• Opened lower by 21 ticks before extending to a 92.48 base. Pressure which came given the lead from peers and despite downward revisions to UK Q3 GDP and very bleak CBI commentary from its latest indicator.
• CBI showed that business expectations are now at their lowest since autumn-2022 (Truss budget period) with leaders expecting activity to fall in Q1.
• 92.48 base remains comfortably above Friday’s 92.18 low and the contract trough from Thursday thereafter at 91.87.