Softer Tone On Sintra Soundbites Ahead Of US Data

Core FI is a little weaker in European morning trade Tuesday, with most instruments trading within fairly narrow ranges by recent standards.

• Market focus is on the ECB's Sintra conference which has provided some high-profile soundbites but little that has impacted markets so far.
• Gilts are underperforming with UK yields up 2.5-3.5bp through the 10Y tenor, with some modest bear flattening in Germany (short-end up 1-1.5bp to 10-30 up 0.5-1bp). US yields are fairly flat (up 1-2bp across the curve).
• ECB Pres Lagarde repeated recent themes in her Sintra speech this morning, noting her "intention is not to signal any future decisions".
• MNI interviewed Belgium's Wunsch in Sintra: he sees a September hike absent a fall in core inflation. Terminal ECB hike pricing is +2bp on the day, still just shy of 4%.
• BoE’s Dhingra offered familiar dovish tones; terminal hike pricing remains a little higher on the day (+0.7bp).
• Plenty of US data ahead including durable goods, house prices, new home sales, consumer confidence, and Richmond Fed manufacturing. The supply highlight is $43B 5Y note. No Fed speakers are scheduled.

Latest levels:

• Sep US 10Y futures (TY) down 4/32 at 113-03.5 (L: 113-01 / H: 113-09)
• Sep Bund futures (RX) down 13 ticks at 134.63 (L: 134.39 / H: 134.89)
• Sep Gilt futures (G) down 43 ticks at 95.88 (L: 95.84 / H: 96.26)
• Italy / German 10-Yr spread 0.2bps tighter at 163.9bps