Fresh Cycle Highs For Bund Yields, Gilts Outperform Major Peers

{EU}{GB} BONDS: Recoveries in core global FI markets are sold into, with a lack of weekend escalation in the Israel-Iran situation and U.S. fiscal support for Ukraine dominating most macro conversations. That keeps bearish technical backdrops intact.

• Bund yields register a fresh cycle peak above 2.53%, with the curve bear steepening as benchmark yields move 1.5-3.5bp higher on the day.
• The periphery remains tighter vs. Bunds, although a move away from best levels in equity markets limited that move. Click for further colour.
• Gil futures are mid-range, +10 or so.
• The UK curve sees some light twist steepening, yields 0.5bp lower to 2.0bp higher.
• Friday’s dovish comments from BoE Deputy Governor Ramsden continue to dominate UK discussions.
• STIRs once again fully discount an August cut from the BoE.
• Gilts tighten a little across the curve vs. U.S. and German peers as a result.
• We have also flagged increased press speculation re: pre-election fiscal easing, although this hasn’t been a market mover as of yet.
• ECB speak from Lagarde headlines today’s macro calendar, with the Fed now in its pre-meeting blackout period.
• Participants also remain on the lookout for European syndications (an EU announcement is expected as soon as today, with plenty of other potential deals also noted).