PMIs the driver this morning with big moves in Bunds

There have been some big moves in Bunds this morning following the stronger-than-expected German, French and Eurozone PMI prints. However, we would caution that some of the moves look a little excessive - there are clear inflationary pressures, but the underlying details outside of prices and employment look rather weak. The UK PMI in contrast saw less of a headline surprise but was more positive in the underlying details.

• The bear steepening of the Bund curve has seen 2s5s steepen 2.4bp and 2s10s steepen 3.4bp on the day. The gilt curve has seen more of a parallel 1.6bp shift with yieldds higher while the UST curve has steepened most in the 2s7s area (1.5bp steeper on the day).
• TY1 futures are down -0-3+ today at 129-28+ with 10y UST yields up 0.8bp at 1.633% and 2y yields down -0.6bp at 0.627%.
• Bund futures are down -0.63 today at 171.14 with 10y Bund yields up 4.3bp at -0.260% and Schatz yields up 0.3bp at -0.834%.
• Gilt futures are down -0.17 today at 126.12 with 10y yields up 1.5bp at 0.947% and 2y yields up 1.4bp at 0.535%.