Slightly Bear Steeper Post-CPI/Pre-PPI

Global curves are leaning bear steeper in overnight trade Thursday, with Bunds and Gilts testing Wednesday's lows but Treasuries more rangebound.

• A Reuters sources piece pointing to a 25bp ECB hike in May provided a dovish contrast to Wednesday's Holzmann comments favouring a 50bp raise.
• That boosted Bunds to session highs before they reversed lower, as equities recovered from overnight lows.
• Periphery EGB spreads are a little wider, with one notable move being Spanish 10Y yields moving above Treasuries for the first time since 2020.
• The key release of the session is US PPI, which in conjunction with yesterday's CPI will inform estimates of the Fed's preferred price gauge (PCE). Jobless claims feature alongside.
• The central bank speaker highlight is an MNI event with BoE's Pill, with no FOMC participants on the schedule.
• Italy/UK/Spanish auctions saw solid-to-strong results; $18B 30Y Treasury Bond re-open is the US supply highlight;

Latest levels:

• Jun US 10Y futures (TY) down 1/32 at 115-21.5 (L: 115-20 / H: 115-30)
• Jun Bund futures (RX) down 26 ticks at 134.89 (L: 134.7 / H: 135.5)
• Jun Gilt futures (G) down 11 ticks at 102.89 (L: 102.54 / H: 103.3)
• Italy / German 10-Yr spread 1.5bps wider at 186bps