Off Highs Following Upward Manufacturing PMI Revisions

Core/semi-core EGBs are off intraday highs following mixed signals in the April manufacturing PMIs.

• Bunds rallied after the Italian PMI printed notably below consensus at 47.3 (vs 50.4 cons), but gains were pared after the French, German and Eurozone final releases were revised upward.
• The overall backdrop remains positive though, following yesterday’s less hawkish than expected Fed meeting.
• Bunds are +42 ticks at 130.50, though the technical trend outlook remains bearish.
• German and French cash yields are 3 to 4bps lower today.
• This morning’s LT OAT auction saw solid demand metrics across lines.
• 10-year periphery spreads to Bunds are tighter this morning, with European equity softness preventing any more notable moves to the downside.
• The remainder of today’s regional data calendar is light, leaving markets to focus on this afternoon’s US data releases.
• ECB’s Lane is scheduled to speak after hours.