Cheaper Alongside Tsys & Gilts, With Knee-Jerk Moves Surrounding BoE Fading

EGBs initially looked to gilts for cues post-BoE, with UK paper cheapening further despite the BoE leaving its interest rate unchanged.

• Bund futures initially hit fresh session highs as gilts knee-jerked higher alongside the BoE decision, before fading, once again alongside gilts.
• Gilt futures have managed to register fresh session lows, but Bunds haven’t seen a test of their Asia-Pac base, with the contract last -60.
• Some early NY weakness in Tsys would have also helped, with the same holding true for a tick away from worst levels in crude oil futures.
• German cash benchmarks run 5.0-6.5bp cheaper, with the belly/intermediates selling off a touch more than the wings.
• Core/semi-core EGBs are still little changed to a touch wider vs, Bunds.
• Meanwhile, weakness in equities and the outright post-FOMC cheapening has biased peripherals wider. BTPs sit 4bp wider on the session vs. Bunds.