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Oil driving FI lower amid light volumes


Core fixed income has been grinding lower this morning, against a backdrop of higher oil prices and mixed equity markets. There is very little liquidity at present but it does seem as though the moves are being driven by oil markets this morning with STIR futures are lower.

  • In the 10-year spce, gilts are the underperformers with yields up around 5bp (following the rally at the back-end of last week) with UST and Bund yields up around 4bp. All three futures contracts remain above Thursday's lows.
  • The US has seen the biggest move at the front-end with 2-year yields up 5.0bp against 3.2bp for 2-year gilts and 2.2bp for Schatz.
  • This has led to the US curve bear flattening but German and gilt curves bear steepening.
  • Today sees a relatively light calendar but speeches from Fed's Powell and Bostic.
  • TY1 futures are down -0-13+ today at 124-07 with 10y UST yields up 4.1bp at 2.193% and 2y yields up 5.0bp at 1.989%.
  • Bund futures are down -0.58 today at 160.79 with 10y Bund yields up 3.7bp at 0.407% and Schatz yields up 2.2bp at -0.328%.
  • Gilt futures are down -0.60 today at 122.03 with 10y yields up 5.0bp at 1.545% and 2y yields up 3.2bp at 1.230%.

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