Europe PMIs On Positive Side, But Eyes On D.C.

Global Core FI is flat/mixed to begin the week, while periphery EGB spreads have widened from narrowest levels set on the open. With month-end out of the way, attention returns to COVID developments globally and fiscal matters in the U.S.

Most attention in the European morning has been on July Manuf PMIs: of note, Italy and Spain each beat expectations, while France/Germany/Eurozone saw upward revisions from Flash. In contrast, UK Final PMI was revised down slightly.

However, these releases didn't really move the needle in markets. TikTok headlines overnight underlined continued US-China tensions, but we continue to await news on the US fiscal front. Latest headlines suggest that Pres Trump considering executive action if there is no Congressional deal reached (per WaPo, few details).

ISM this afternoon will be of more note, but again, diffusion indices haven't been particularly closely watched. In particular this week's payrolls data will be much more important.** Latest levels:

• Sep US 10-Yr futures (TY) steady at at 140-2.5 (L: 139-30 / H: 140-05.5)
• Sep Bund futures (RX) down 23 ticks at 177.29 (L: 177.14 / H: 177.48)
• Sep Gilt futures (G) down 12 ticks at 138.43 (L: 138.27 / H: 138.49)
• Italy / German 10-Yr spread 1.2bps wider at 154.9bps