Rally continues

Core fixed income has been grinding higher this morning, continuing yesterday's reversal which began following the release of US CPI and breaking through a number of key technical levels in the process.

• TY1, Bund and BTP futures are all at their highest levels of May while gilt futures were last higher on 7 April. Bunds and gilts have seen larger moves today than Treasuries with curve bull flattening.
• This morning saw the release of disappointing UK activity data - showing that Q1 growth was weaker than expected with March monthly GDP data moving into negative territory (the first full month following the Ukraine war but ahead of the increase in consumer energy prices or national insurance rises which both came in in April).
• The focus shifts back to US inflation with PPI due for release at 13:30BST / 8:30ET, alongside jobless claims.
• TY1 futures are up 0-18 today at 119-26+ with 10y UST yields down -9.4bp at 2.824% and 2y yields down -6.9bp at 2.571%.
• Bund futures are up 2.03 today at 154.94 with 10y Bund yields down -12.1bp at 0.862% and Schatz yields down -7.2bp at 0.062%.
• Gilt futures are up 1.62 today at 120.63 with 10y yields down -12.3bp at 1.701% and 2y yields down -8.7bp at 1.185%.