Core FI higher after a weak gilt open

Core fixed income is higher on the day after some weakness around the gilt open (which saw gilt futures touch yesterday's lows briefly).

• Economic data has been mixed today with German factory orders weak (showing weak orders from outside of the euro area) while the ZEW expectations index was also weak but Spanish industrial production data was stronger than expected. Eurozone retail sales data was in line with expectations.
• The US will return to their desks today after the long July 4th weekend which should help liquidity later today.
• Across Europe it has been a fairly heavy day for supply with a French 30-year E5bln syndication while Austria, Germany and the UK are all holding bond auctions.
• The highlight of the afternoon session will be the ISM non-manufacturing, particularly the inflation and labour sub-components.
• TY1 futures are up 0-2 today at 132-23+ with 10y UST yields unch at 1.426% and 2y yields up 0.4bp at 0.239%.
• Bund futures are up 0.25 today at 172.95 with 10y Bund yields down -1.6bp at -0.228% and Schatz yields down -0.6bp at -0.672%.
• Gilt futures are up 0.11 today at 128.29 with 10y yields down -1.0bp at 0.703% and 2y yields unch at 0.052%.