Data At the Fore Thus Far, Early Richening More than Reversed

Bund futures operate around recently registered session lows, last -55 or so, with year-to-date lows providing the next obvious targets for bears. German yields are 4-5.5bp higher on the day, with the curve bear steepening.

• EGBs generally sit a little wider vs. Bunds, with GGBs seeing the most pronounced move there.
• The early bid surrounding German NRW and French CPI data has been more than reversed, with the revisions higher in the final Eurozone & UK services PMI releases filtering in.
• Elsewhere, expectations surrounding the German national CPI readings played a part as post-NRW regional prints filtered out (MNI calculations now point to a headline reading of 3.6-3.7% vs. BBG survey consensus of 3.7%, with ~87% weighting of the national print now released). The NRW print presented a more pronounced downside threat (+3.5% Y/Y).
• Gilt futures last show -25 or so, ~10 ticks off lows. Yields are 4-5bp higher across the curve.
• The latest BoE DMP survey highlights included a light picked up in wage growth expectations, while year-ahead employment intentions moved further away from recent lows. Meanwhile, year-ahead output price intentions are unchanged.
• Smooth enough digestion of EGB supply did little to counter the cheapening move, with delta hedging requirements ahead of the auction adding to the data-inspired weakness.
• Conversely, a well-received round of gilt supply helped the UK long end find a base.