Long End A Little More Resilient Than Core European Bonds

Gilts have generally biased the wider core European FI complex cheaper, although longer dated Tsys have been more resilient, with a TY block buyer (+6.5K) adding some support in more recent trade.

• Cash Tsys sit little changed to 5bp cheaper as a result, with the curve flattening as 2-Year yields push through their previous multi-month highs.
• TYM3 is 0-02+ off the base of its narrow 0-06+ range.
• Outside of the TY block buyer, a 10K screen seller of the TYN3 118.00 calls and quarterly futures roll activity has been noted, with the latter supporting wider volumes.
• FOMC-dated OIS still points to a terminal rate just below 5.20%, with ~44bp of cuts priced by year end (vs. current terminal rate pricing, which is pencilled in for the July FOMC).