Core Bonds are better offered

EGBs started the European session better bid on the opening bell, but have since faded weighted by heavy Spanish and French supplies, as well as better buying interest in Equities.

• Italian PMI moves back into contraction, while France confirmed 3rd straight expansion, and Germany showed 2nd month of expansion. German long end, Buxl, Bund, Bobl and Schatz trade above averages volumes, but once again all spread related.
• Gilts, saw final PMI release, and despite that UK PMI pointing to fastest pace of expansion in over five years, the rate of job losses is picking up.
• US have stayed within the Asian session's range 139.13-139.20 (low/high), but are trading heavy in line with EGB's
• Looking ahead, US Jobless claims, Service PMI (final) and ISM Services Index will be in focus on the data front.
• Fed Evans will be the scheduled speaker.
• Bund futures are down -0.06 today at 176.61 with BTP futures up 0.04 at 147.64 and OAT futures down -0.08 at 168.56.
• Gilt futures are down -0.16 today at 136.68 with 10y yields up 1.9bp at 0.248% and 2y yields up 1.6bp at -0.104%.
• TY1 futures are down -0-3 today at 139-19+ with 10y UST yields up 1.4bp at 0.663% and 2y yields up 0.4bp at 0.138%.