SNB & European Manufacturing PMIs Add To Fed-Driven Rally

Core global FI markets a little off session highs.

• Softer-than-expected Eurozone flash manufacturing PMI data and a rate cut from the SNB (only 7bp of easing was priced ahead of the decision) add to the Fed-driven rally in core global FI markets early today.
• Those inputs outweigh any worry re: today’s busy EGB supply slate.
• UK PMI data (firmer-than-expected manufacturing & slightly softer-than-expected services) had little net impact.
• Bund futures last +39 at 132.30, ~20 ticks off highs. The 20-day EMA (132.54) went untested).
• German cash yields are 1.5-5.5bp lower on the day, curve bull steepens.
• 10-Year peripherals little changed to tighter vs. Bunds on the bond supportive-backdrop and with ECB-dated OIS moving to price ~92bp of ’24 cuts.
• Gilt futures pierce initial resistance with bulls looking to 100.00 next. Contract off highs last +32 at 98.38.
• Cash gilt yields 0.5-5.0bp lower on the day, 5s outperform.
• BoE-dated OIS showing ~74bp of ’24 cuts vs. ~68bp late yesterday.
• The BoE decision, Fedspeak from Barr, U.S. data and aforementioned EGB supply provide the scheduled points of interest from here.