Peripheral spreads tighten

After a mixed open to the European session, we have seen peripheral spreads tighten. A slightly disappointing Spanish manufacturing PMI was offset by a better than expected Italian manufacturing PMI. Political risk fears continue to abate while the EU vaccine position has improved a little over the weekend after AZ agreed to supply additional doses of the vaccine, improving sentiment somewhat.

• In terms of supply so far this morning, the EFSF have tapped a 7-year issue while Finland has announced a E3bln mandate for a new 30-year RFGB.
• The highlight today will be the ISM manufacturing data in the US. We will also hear from the Fed's Kashkari, Kaplan and Bostic.
• TY1 futures are up 0-3+ today at 137-04+ with 10y UST yields up 1.1bp at 1.078% and 2y yields down -0.3bp at 0.108%.
• Bund futures are up 0.03 today at 177.28 with 10y Bund yields unch at -0.519% and Schatz yields up 0.5bp at -0.733%.
• Gilt futures are down -0.03 today at 134.04 with 10y yields down -0.3bp at 0.323% and 2y yields up 0.2bp at -0.110%.