Curve flattening

It has been a volatile session this morning this curve flattening the theme.

• The biggest moves since yesterday's close have been Treasuries, moving lower after Powell's hawkish comments yesterday. However, they are still above the levels seen overnight during Asian trading. The curve has bear flattened.
• There has been an even bigger bear flattening in the German curve with 10-year Bund yields only 0.4bp higher on the day but Schatz yields 7.0bp higher at the time of writing. This again is continuation after yesterday's hawkish comments from ECB's Wunsch and de Guindos as well as Fed's Powell and BOE's Mann.
• Gilts in contrast have seen a much more modest flattening of the curve. 2-year yields up just 1.4bp, but this is largely because the moves yesterday were so large.
• We have had PMI readings this morning that have largely seen services prints come in higher than expected but manufaturing prints have been more mixed (entering into contractionary terriotry in Germany). UK retail sales were also disappointing.
• Looking ahead the data calendar is relatively quiet with the US PMI the only real notable release. ECB's Lagarde and BOE's Bailey are both due to speak again following appearances yesterday, but neither are expected to say anything significant.
• TY1 futures are down -0-11+ today at 118-12+ with 10y UST yields up 3.1bp at 2.943% and 2y yields up 7.6bp at 2.761%.
• Bund futures are down -0.18 today at 153.62 with 10y Bund yields down -0.8bp at 0.937% and Schatz yields up 6.4bp at 0.252%.
• Gilt futures are down -0.18 today at 117.57 with 10y yields down -1.2bp at 1.999% and 2y yields up 0.8bp at 1.748%.