Bunds consolidate but Treasuries continue to slowly descend

It has been a day of consolidation for EGBs and gilts which continue to remain in the range they have been in since the middle of the European morning session yesterday. Treasuries, by contrast, have continued to fall, moving to levels seen around the European open on Wednesday. The consolidation in fixed income has come against a backdrop of weaker stocks across both Europe and the US.

• UK labour market data was the highlight of the calendar for today and generally came in better than expected, albeit with a fall in payrolls in the experimental March data.
• The market now looks ahead to the ECB meeting on Thursday, during which the main question for markets will be how much the ECB focuses on the future potential wind down of PEPP purchases and how much it focuses on the current lockdowns and slow vaccine rollout across much of the Eurozone.
• TY1 futures are down -0-4 today at 132-03+ with 10y UST yields up 1.2bp at 1.618% and 2y yields up 0.1bp at 0.160%.
• Bund futures are down -0.15 today at 170.33 with 10y Bund yields up 0.8bp at -0.227% and Schatz yields up 0.3bp at -0.684%.
• Gilt futures are down -0.15 today at 128.40 with 10y yields up 1.3bp at 0.767% and 2y yields up 0.9bp at 0.043%.