Core FI moves higher with Spring Statement in focus

Core fixed income continued to drift lower overnight, but has reversed all of these losses so far in European trading with Bund and gilt futures approaching yesterday's highs at the time of writing.

• There has not been too much in terms of headline flow driving markets this morning, instead it seems as though investors are reacting to yields moving to cycle highs and buying the dip.
• Gilts continue to outperform Bunds which outperform USTs. This despite UK headline and core CPI suprising consensus by 0.2ppt to the upside.
• Peripheral spreads are mixed with Italy, Spain and Portugal seeing spreads tighten but eastern European states and semi-core are generally seeing spreads widen a little today.
• The focus later today will be on the release of the gilt remit and the Chancellor's Spring Statement (mini-budget). This will begin around 12:30GMT / 8:30ET with the remit normally out around an hour or so later. For our full preview click here.
• Elsewhere we have a number of central bankers speaking. At the BIS Innovation Summit we have a panel consisting of Fed's Powell, BOE's Bailey and ECB's Nagel at midday GMT / 8:00ET (monpol probably won't be discused) while we also have ECB's Visco and Fed's Daly and Bullard due to speak.
• TY1 futures are unch today at 122-24 with 10y UST yields down -1.6bp at 2.368% and 2y yields down -1.9bp at 2.148%.
• Bund futures are up 0.40 today at 159.83 with 10y Bund yields down -2.6bp at 0.476% and Schatz yields down -2.3bp at -0.266%.
• Gilt futures are up 0.42 today at 120.84 with 10y yields down -5.0bp at 1.657% and 2y yields down -5.6bp at 1.347%.