Bear steepening extension

A busy session for EGBs, with the bear steepening bias extending today.

• Bund are being dragged lower by the UK Gilts this afternoon, after the pound rally to highest level since 2018 against the USD and in turn UK 10yr yield reached levels last seen since March.
• Gilt/Bund spread is also at its widest since March
• Peripheral trade tighter, with Italy leading at 5.5bps.
• Bund support to watch is at 174.06 proj of Jan 4 - 12 sell-off from Jan 27 high.174.06, reference 174.30, also equates today to the next yield resistance at -0.303% (10/06 high)
• Looking ahead Fed Barkin speaks on panel
• Bund futures are down -0.48 today at 174.20 with 10y Bund yields up 3.3bp at -0.314% and Schatz yields up 0.3bp at -0.690%.
• BTP futures are up 0.20 today at 151.33 with 10y yields down -2.2bp at 0.625% and 2y yields down -2.8bp at -0.343%.
• OAT futures are down -0.31 today at 164.13 with 10y yields up 2.0bp at -0.65% and 2y yields down -1.5bp at -0.627%.