Smaller FI Rallies Than Equities Would Suggest

It has been a bit of a mixed session for core fixed income in the face of clear risk off moves seen in European and US equity markets.

• Gilts caught up with some of the overnight post-Fed move in Treasuries on the open and have moved higher through the European morning session. Bund futures and Treasury futures are little changed in the European session.
• Eurozone peripheral spreads seem to be responding to the risk-off sentiment seen in equities and have widened a little on the day.
• Economic data has so far had little impact on markets with German GDP a bit weaker than expected, German state CPIs mixed and Spanish HICP soft. The highlight later today will be the first print of US Q2 GDP.
• TY1 futures are up 0-4+ today at 139-28+ with 10y UST yields down -1.8bp at 0.558% and 2y yields down -0.7bp at 0.126%.
• Bund futures are up 0.44 today at 177.39 with 10y Bund yields down -2.8bp at -0.529% and Schatz yields down -1.5bp at -0.705%.
• Gilt futures are up 0.26 today at 138.53 with 10y yields down -2.3bp at 0.094% and 2y yields down -1.7bp at -0.99%.