Core Bonds recover from the lows

Core bonds recover some grounds off their lows.

• Bund found a small bid, to trade flat on the day, led by better selling going through in Equities since the Govie opening bell.
• German curve remains flat, while peripherals trade inline with Bunds.
• Italy is tighter by 0.5bp, and Portugal sits 0.4bp wider in early trading.
• Gilts are up 5 ticks, while the 5/30s curve is on the margin bear flatter, and off the steepest levels we have seen since the start of September.
• US Treasuries have found a base overnight, following the large sell off in the longer end part of the curve yesterday.
• Worth keeping an eye on US 5/30s, which are off the high of the session.
• Some attention on price development there.
• Level to watch, and the steepest for 2020, comes at 128.526 (05/06 high).
• A break through here, would put that part of the curve at its steepest since 12/12/16, at 128.965.
• Looking ahead, sees US Aug Trade Balance, JOLTS, Fed Powell, Harker, Bostic and Kaplan..
• In terms of supplies we get US $52bn of 3yr notes