MNI: UK FINAL JAN MANUF PMI 48.3 (FLASH: 48.2); DEC 47.0

MNI: EUROZONE FINAL JAN MANUF PMI 46.6 (FLASH: 46.1); DEC 45.1

MNI: GERMANY FINAL JAN MANUF PMI 45.0 (FLASH: 44.1); DEC 42.5

MNI BRIEF: Fed's Goolsbee Supports Slowing Rate Cuts

MNI BRIEF: US Dec Core PCE Inflation In Line With Expectations

MNI BRIEF: Fed's Bowman Wants Inflation Progress Before Cuts

MNI: FRANCE FINAL JAN MANUF PMI 45.0 (FLASH: 45.3); DEC 41.9

MNI: ITALY JAN MANUF PMI 46.3 (FCST: 46.9); DEC 46.2

MNI: SPAIN JAN MANUF PMI 50.9 (FCST: 53.5); DEC 53.3

GERMANY: Economy Ministry Lowers 2025 Growth Forecast As Expected

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

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BONDS: EGBs-GILTS CASH CLOSE: OATs Give Up Early Outperformance On Geopolitics

BONDS

European bonds rallied sharply Tuesday, with geopolitical concerns driving a safe-haven bid later in the session.

  • Core FI and periphery EGBs alike enjoyed gains in the morning, led by OATs on reports of forthcoming French fiscal tightening measures.
  • OATs would give up some of their gains later in the day after French PM Barnier failed to follow up with policy specifics - 10Y to Bund -2.1bp on the day, vs -5.2bp at the intraday tights.
  • Global core FI soared in mid-afternoon trade with risk spreads widening as Iran launched missiles at Israel.
  • Data was not a market mover: Eurozone September flash inflation had been anticipated after national-level data already released; manufacturing PMI data from Italy (below-consensus) and Spain (above-consensus) likewise failed to move the needle.
  • The German and UK curves both bull flattened. Periphery EGB spreads closed mixed, but little changed overall.
  • Wednesday's calendar includes Eurozone labour market data and several ECB speakers including Schnabel and Lane, as well as the record of the September BoE FPC meeting.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

  • Germany: The 2-Yr yield is down 4.8bps at 2.02%, 5-Yr is down 7.2bps at 1.875%, 10-Yr is down 8.7bps at 2.036%, and 30-Yr is down 9.8bps at 2.361%.
  • UK: The 2-Yr yield is down 2.8bps at 3.955%, 5-Yr is down 4.3bps at 3.817%, 10-Yr is down 6.2bps at 3.941%, and 30-Yr is down 7.1bps at 4.513%.
  • Italian BTP spread up 0.2bps at 133.2bps / Spanish down 0.5bps at 79.8bps 
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