Flat To a Little Firmer

European & UK data inputs helped bonds stabilise during the Asia-London handover, with little meaningful headline flow to go off since then.

• Worry surrounding Chinese equities (which came under modest pressure during Asia-Pac dealing) hasn’t had much impact when it comes to wider risk assets, with the stabilisation in bonds promoting some outperformance for the tech sphere (yesterday’s big name brokerage upgrade for Apple, AI hopes & TSMC earnings provided some of the more meaningful inputs over the last 24 hours or so when it comes to tech news).
• The NASDAQ 100 contract leads e-minis higher as a result.
• Elsewhere, the broader USD is softer against this backdrop, albeit with the BBDXY sticking within yesterday’s range.
• U.S. cash Tsy yields are little changed across the curve, reversing some light selling seen in Asia-Pac hours. UoM sentiment data (watch inflation expectations) and pre-blackout Fedspeak awaits.
• German yields are flat to 3bp firmer on the day, flattening. Bund futures had a few shallow looks below yesterday’s base, before recovering. Bulls haven’t threatened yesterday’s peak, with the contract a little shy of recent session highs. Softer-than-expected German PPI data headlined early on Friday.
• 10-Year European peripherals compress to Bunds given the broader risk backdrop.
• Cash gilt yields are 2.5-4.5bp lower across the curve, bull flattening. Futures have ticked away from session highs after building on the recovery from late Wednesday lows. Softer-than-expected retail sales data has dominated local news flow. BoE-dated OIS is off dovish session extremes after a volatile few days of trade.