Above Friday's highs in contrast to the equity market rally

Following on from the strong end to last week's session, core fixed income moved above Friday's highs today, although we are a little off these highs now for Treasuries and gilts which saw their highs of the day around the open.

• The move higher in core fixed income is in stark contrast to the moves higher in equity markets with most indices across Europe 1.5-2.0% higher with US futures around 1.0-1.5% higher.
• Peripheral spreads have moved tighter, with BTP-Bund 10-year spreads 3.8bp tighter on the day and moving back below 100bp.
• Data this morning has seen regional German inflation come in a bit ahead of expectations, Italian inflation 3 tenths above expectations (for HICP Y/Y) and PMI data across Europe largely in line or a little higher than the flash estimates. Focus later today will be on the ISM manufacturing survey.
• TY1 futures are up 0-12+ today at 133-03+ with 10y UST yields up 3.1bp at 1.438% and 2y yields up 0.1bp at 0.131%.
• Bund futures are up 0.64 today at 174.04 with 10y Bund yields down -3.9bp at -0.301% and Schatz yields down -1.3bp at -0.681%.
• Gilt futures are up 0.26 today at 128.03 with 10y yields down -3.0bp at 0.788% and 2y yields down -1.2bp at 0.106%.