Global Curves Mixed As Attention Shifts From Powell To Jobs

Global core FI curves are mixed in early Thursday trade, with Germany’s bear steepening, the UK’s bear flattening, and the US’s twist steepening.

• The US short-end is easily outperforming its global counterparts, with 2Y yields down 4bps. Fed hike prospects have softened slightly overnight as attention shifts away from Powell toward Friday’s nonfarm payrolls report (MNI’s preview will be out later today).
• Bund and Gilt yields gapped higher on the open despite no discernable headline drivers (ECB’s Villeroy revealed nothing new in saying the peak of inflation is likely to be seen in H1).
• European yields have traded largely sideways since the open, with the main discernable discrepancy being a pullback in Schatz yields vs the UK short end maintaining weakness.
• A quieter day for European data, but we get more US labor market indicators with Challenger job cuts and weekly jobless claims.
• The only scheduled FOMC speaker remaining before the blackout period starts this weekend is VC Barr today (topic is crypto). BOE’s Breeden and ECB’s Vujcic appear later in the session as well.
• $18B 30Y Bond features in US supply.

• Jun 10-Yr US futures (TY) down 1.5/32 at 110-28 (L: 110-23.5 / H: 110-31.5)
• Jun Bund futures (RX) down 75 ticks at 131.18 (L: 131.07 / H: 131.77)
• Jun Gilt futures (G) down 67 ticks at 100.25 (L: 100.06 / H: 100.5)
• Italy / German 10-Yr spread 0.9bps wider at 179.1bps