Another aggressive move - higher today

Core fixed income has moved fairly aggressively higher this morning. Although we saw some downward revisions to European PMI data the move seems more of a retracement of yesterday's move ahead of the US getting back to the office. The German curve has bull steepened while the gilt curve has seen more of a parallel move.

• As well as the PMIs we have received the BOE's FSR this morning, which saw downside stability risks rising. Stressed commodity markets, tightening financial conditions and the vulnerabilities of the property market with interest rates rising were all risks put in the spotlight in the report. Nevertheless, UK banks were deemed to be resilient to the increasing stresses. The BOE's Financial Policy Committee announced that it was raising the Counter-cyclical Capital Buffer (CCyB) from 1% to 2% in July 2023, taking it back to a normal level and forcing banks to enhance their capital provisions.
• Upcoming we will see the final print of durable goods as well as US factory orders.
• In terms of speakers today we have the BOE's Tenreyro appearing on a panel on monetary and fiscal policy interactions but no scheduled Fed/ECB speakers.
• TY1 futures are up 0-7 today at 119-15+ with 10y UST yields up 1.4bp at 2.896% and 2y yields up 5.5bp at 2.890%.
• Bund futures are up 1.11 today at 150.22 with 10y Bund yields down -6.4bp at 1.266% and Schatz yields down -10.9bp at 0.498%.
• Gilt futures are up 0.68 today at 115.39 with 10y yields down -6.0bp at 2.134% and 2y yields down -5.8bp at 1.727%.