Firmer As The London Morning Wears On

As mentioned, we haven’t seen anything in the way of meaningful, overt triggers for the bounce from session cheaps in core global FI markets, with reports alluding to continued Sino-U.S. tensions (surrounding a potential Taiwanese official stopping off in the U.S. in August) an unlikely driver. That leaves us pointing to European reaction to softer than expected Y/Y Chinese GDP data, as well as related mark downs in sell-side Chinese GDP forecasts and fresh weakness in oil futures as the likely drivers in recent trade. Cash Tsys run 2.5-4.5bp richer, with the belly/intermediates leading, while TYU3 is +0-06, 0-01 off the top of its 0-11 session range. FOMC-dated OIS is little changed to 5bp softer on the day given the aforementioned developments/moves in core global FI.