Early Bid Fades

Gilts lead a pullback from early session highs, with Gilt futures through yesterday’s low, last dealing 40 ticks or so cheaper on the day. The Gilt curve sees 0.5bp of richening to 3.5bp of cheapening, as the curve twist steepens.

• Technically, bears now look to 94.58 in futures, the Jul 17 low.
• Bund futures sit 10 ticks above settlement, with the major cash benchmarks running 1-2bp richer. Core/semi-core 10-Year spreads vs. Bunds are little changed to a touch wider on the day. Meanwhile, peripherals are mixed in spread terms, with light outperformance noted in 10-Year GGBs, while Portuguese paper widens the most vs. Bunds.
• Macro headline flow remains light, with little in the way of meaningful headline drivers for the move away from best levels.