EGBs & Gilts Off Cheaps Into NFPs

Bund & Gilt futures head towards NFPs a little above their respective session cheaps after a frenetic couple of days of trading has applied pressure to the spaces. This morning’s price action was calmer, with ECB- & BoE-dated OIS generally consolidating the bulk of this week’s bull steepening, sitting a little below yesterday’s hawkish extremes.

• German cash benchmarks are 1bp richer to 2.5bp cheaper, twist steepening. Meanwhile, Bund futures sit -10 or so on the day, with a lack of meaningful follow through noted after yesterday’s session (multi-month) low was breached.
• Most EGB curves see similar price action, with core, semi-core and peripheral paper tightening vs. Bunds at the 10-Year point (by 1-2bp).
• Gilt futures are 30 or so cheaper on the day, with 5.5bp of richening to 3.5bp of cheapening seen in cash trade, with the curve once again twist steepening.
• ECB & BoE speak provide European & UK points of interest ahead of the weekend, but the U.S. NFP print is set to garner most of the attention.