Outperforming Peers After Leading Yesterday's Sell Off

Gilts are the outperformer on the day when compared to the likes of German and U.S. peers across the curve. TY and Bund futures both breach previous (and yesterday’s) session lows as participants react to the latest round of U.S. data, while gilt futures last show +17 at 98.50, comfortably off worst levels of the day (gilt bears have not threatened yesterday’s low in the contract at all).

• Cash gilt yields are 2.5-4.0bp lower on the day.
• A reminder that gilts led yesterday’s core global FI sell off on domestic CPI data, with the degree of yesterday’s weakness/cross-market spread widening and cleaner positioning in both the long (at least in cash, more on yesterday’s apparent movement in futures positioning to come shortly) and short ends likely factoring into today’s outperformance.