Core Curves Twist Steepen, ECB Speak, PMIs & ECB Forecasts Eyed Ahead Of NFPs

Late Thursday comments from ECB President de Guindos (September hike debate open, little change set to be made to updated inflation forecasts) were earmarked as a potential source of the modest pressure placed on EGBs early today, although curves moved steeper as opposed to flatter.

• A late NY downtick in U.S. Tsys will have also aided early the direction of travel.
• On the other side, slightly softer than flash readings in the final Eurozone manufacturing PMI data and Morgan Stanley calling time on the ECB rate hiking cycle limited the weakness (ECB-dated OIS now shows ~7bp of tightening for this month, with terminal deposit rate pricing hovering around 3.91%).
• Bund futures are -20, off lows, while the major German cash benchmarks sit 1bp richer to 2bp cheaper as the curve twist steepens.
• Most other core/semi-core curves also twist steepen, with spreads vs. Bunds little changed on the day.
• Peripherals have seen less generic moves.
• Matters offshore are set to dominate for the rest of the day, with the monthly U.S. NFP release and ISM manufacturing survey eyed.