Curves Trading Mixed On Flash PMI Day

Early trade Friday sees major curves mixed, with the US twist steepening, the UK bull flattening (and outperforming), and Germany's bear flattening.

• The major focus in the European morning has been on above-consensus composite flash PMIs, with the beats driven by strong services offsetting weak manufacturing.
• The data pushed yields to session highs, but faded quickly, leaving core FI closer to flat on the session.
• Gilts are marginally outperforming, after UK Retail sales missed consensus (though some mixed revisions are notable).
• The session's remaining data highlight is the US prelim PMIs.
• In terms of central bank communications, ECB's Elderson and Guindos speak later (the latter for the second time in the session; neither he nor Vujcic earlier moved the needle).
• And we get the final scheduled pre-FOMC blackout period appearance in the form of Gov Cook. There were no surprises from Bostic and Harker overnight.

Latest levels:

• Jun US 10Y futures (TY) up 3.5/32 at 114-24.5 (L: 114-18 / H: 114-26.5)
• Jun Bund futures (RX) up 4 ticks at 134.05 (L: 133.65 / H: 134.41)
• Jun Gilt futures (G) up 44 ticks at 101.11 (L: 100.71 / H: 101.19)
• Italy / German 10-Yr spread 0.6bps wider at 187.6bps