Divergence at the short-end

10-year UST, Bund and gilt yields are all up 2.0-2.1bp this morning but there are more differences at the short-end.

• 2-year UST and Schatz yields are both up around 0.8-0.9bp, with the curve bear steepening while 2-year gilt yields are up 2.6bp with the curve bear flattening.
• The moves in 2-year gilts are not wholly consistent with those seen in short sterling markets, with Greens and Blues only really down 0.5 ticks. The Eurodollar curve has seen bigger moves with Greens down 2.0-2.5 ticks and Reds down 2.5-3.5 ticks on the day.
• There is no real explanation for the divergence, although it could be a product of positioning ahead of the BOE MPC meeting which is scheduled for Thursday.
• Today's calendar is relatively light with Bowman the only scheduled Fed speaker and the final print of US durable goods / US factory orders the only notable data.
• TY1 futures are down -0-6 today at 134-26 with 10y UST yields up 2.0bp at 1.198% and 2y yields up 0.8bp at 0.181%.
• Bund futures are down -0.12 today at 176.70 with 10y Bund yields up 2.1bp at -0.467% and Schatz yields up 0.9bp at -0.770%.
• Gilt futures are down -0.01 today at 130.03 with 10y yields up 2.1bp at 0.541% and 2y yields up 2.6bp at 0.053%.