Brexit talks and fiscal optimism the familiar themes

Optimism on both a Brexit deal and that US stimulus talks are not completely dead have helped sentiment this morning with fixed income markets lower, although they have they have retraced some of their losses.

• In terms of Brexit, EU Chief Negotiator Barnier addressed the European Parliament and his language was much more conciliatory. He said that "an agreement is within reach" and hoped to make progress "in the next few days".
• UK CPI was a little softer than expected but had very little impact on markets, the big event of the day for the UK will be a speech by the BOE's Ramsden on monetary policy at a Society of Professional Economists event.
• We will also hear from the ECB's de Guindos and Lane and the Fed's Mester, Kaskari, Kaplan, Barkin, Quarles and Bullard as well as receive the Beige Book.
• TY1 futures are down -0-4 today at 138-18+ with 10y UST yields up 2.3bp at 0.810% and 2y yields up 0.6bp at 0.150%.
• Bund futures are down -0.23 today at 175.58 with 10y Bund yields up 1.7bp at -0.590% and Schatz yields up 0.7bp at -0.779%.
• Gilt futures are down -0.35 today at 136.11 with 10y yields up 3.3bp at 0.219% and 2y yields up 0.4bp at -0.67%.