BONDS: Gilts, BTPs and OATs Recover From Lows

Gilt, BTP and OAT futures have recovered from intraday lows after coming under pressure at the cash open, while Bunds have seen much less intraday volatility.

• Bund futures are -29 at 132.35, with the 50-day EMA once again providing the first support (at 131.80 today).
• Gilts are -9 at 97.89, after reaching a low of 97.46. There was no obvious trigger for the weakness at the open.
• A steepening theme remains present across the German/UK cash curves, though today’s dynamic has been a bear steepening with the long-end underperforming.
• 10-year peripheral spreads to Bunds are biased tighter, as European equity markets recover from the multi-month lows attained yesterday.
• Today’s regional data hasn’t been market moving. ECB consumer inflation expectations were steady at 1/3-year horizons, while Italian and French consumer confidence improved a little.
• Next week’s calendar sees the Eurozone July flash inflation round alongside preliminary Q2 GDP prints across countries.
• For today, broader macro focus remains on the US PCE report at 1330BST.