PMIs Paint Mixed Picture

European govies trade mixed this morning alongside broad equity gains, modest upside for oil and G10 FX strength vs the USD.

• The gilt curve has bear steepened with the 2s30s spread 2bp wider.
• Bunds started the session on a strong footing and have gradually traded weaker and back to unch on the day. Last yields: 2-year -0.7680%, 5-year -0.7714%, 10-year -0.5651%, 30-year -0.1454%.
• OATs have similarly given up some of the early gains while continuing to trade above yesterday's close.
• BTPs have rallied with cash yields 2-4bp lower on the day.
• French preliminary PMI data for October was a touch weaker than expected while the German composite surprised higher on the back of a strong outturn for manufacturing (58.0 vs 55.0 survey). There was a marginal improvement in the Eurozone composite, which remains in contraction territory. The UK PMIs remain healthy, with only a slight deterioration in the services estimate (52.3 vs 53.0). UK retail sales were also stronger than expected in September (Ex auto: 1.6% M/M vs 0.5% survey)
• The DMO earlier sold GBP1.75bn of 1-/3-/6-month T-bills.