Pressured After 2-Way Flow Around China & PMIs, Dutch Short End Widens On Fiscal Questions

Bund futures trade -30 or so at 130.95, ~10 ticks off the base of their ~50 tick session range, while German yields are flat to 2.5bp higher across the curve, steepening.

• A late extension higher in the Hang Seng, on the back of BBG sources pointing to “unprecedented” policymaker support for Chinese builders via unsecured loans, applied some pressure to core global FI.
• Mixed Eurozone PMIs (softer-than-expected French readings, vs. firmer than expected, but still contractionary, German & Eurozone prints) then provided some two-way impetus.
• Elsewhere, post-election feedthrough has resulted in widening for 2- and 5-year DSLs (see more on that here).
• German paper generally outperforms EGBs across most of the curve, with peripherals wider in the main (excluding GGBs).
• Gilts were also subjected to the aforementioned drivers, before a firmer than expected round of domestic PMIs (including a modestly expansionary services release) provided some pressure in more recent trade.
• Gilt futures trade at fresh session lows at typing, with bears weighing the Nov 15 low (95.93), which is ~20 ticks away. Cash gilt yields run 5-7bp higher on the day, bear flattening.
• The fallout from yesterday’s Autumn statement/gilt issuance plans garners most of the attention domestically.
• ECB speak and the accounts of the Bank’s most recent monetary policy meeting dominate the docket for the remainder of the day, with U.S. cash Tsys closed for the Thanksgiving holiday.