Slide From Best Levels Extends As NY Filters In

Core global FI futures continue to come under pressure, with TY, Bund and gilt contracts all moving through early session lows in the time since our previous update re: the broader cheapening in core global FI markets.

• Nothing in the way of meaningful fresh headline flow has been noted, although the previously identified block flow sale in TY futures (-2.5K), as well as early NY positioning surrounding the latest crude oil uptick and ahead of 20-Year Tsy supply provide the most apparent “explainers” re: the fresh cheapening.
• Ongoing speculation re: the potential for UK income tax cuts also does the rounds, likely factoring into core global FI weakness. With both the UK PM and Chancellor failing to fully quash such rumours, despite pointing to a focus on the supply side when it comes to seemingly impending tax cuts.
• Note that more recent trade has seen a block buy in US UXY futures, which has provided some support.
• UK paper leads weakness in the front end (German and UK curve still bear flatten on the day) while the U.S. leads weakness further out the curve.