Fresh Highs For Bund Futures As UK PMI Disappoints

The softer than expected UK PMI data has boosted Bund futures after the previously outlined fade in the bid around the time of the Eurozone PMI readings, allowing the contract to register fresh highs for the day, beyond 134.00, before ticking back below the figure. The German cash benchmarks run 5-8bp richer as the curve bull steepens. Similar degrees of flattening have been seen on the remainder of the core/semi-core EGB curves, with the major benchmarks there generally somewhere between tracking Bunds to seeing modest underperformance. Peripherals have lagged the wider rally, with the Spanish political situation providing headwinds for SPGBs, while BTP widening has generally paced that seen in their Spanish equivalents.