BTPs fall after wires suggest more issuance needed

Core fixed income has been under some pressure this morning, largely just reversing the moves higher seen yesterday.

• The most market moving news of the day has been a sell-off in BTPs following the release of a Bloomberg story that suggested Prime Minister Draghi was "rushing through" stimulus plans that would require an additional $48bln of borrowing. BTP futures saw a knee jerk fall from 149.03 to 148.63 but have at the time of writing recovered a little over 10 ticks. Our technical analyst notes that initial support comes in at 148.57, the March 30 low, with key short-term support at 148.33, the March 18 low.
• US PPI and an appearance from Kaplan are the only calendar highlights for the remainder of the day.
• TY1 futures are down -0-8+ today at 131-23+ with 10y UST yields up 4.0bp at 1.661% and 2y yields up 0.8bp at 0.158%.
• Bund futures are down -0.27 today at 171.62 with 10y Bund yields up 2.1bp at -0.315% and Schatz yields up 0.7bp at -0.712%.
• Gilt futures are down -0.21 today at 128.27 with 10y yields up 2.9bp at 0.777% and 2y yields up 0.8bp at 0.049%.