Still Firmer

Bonds remain underpinned. TY, Bund & gilt futures have all registered fresh session highs since our most recent updates.

• Friday’s highs have been breached in all 3 futures contracts although more meaningful resistance levels flagged elsewhere are untested/intact.
• Tsys are 1.0-4.5bp lower in yield terms, with a flattening bias seen.
• German benchmark yields are 4.5-7.5bp lower, with the long end lagging.
• Peripherals are wider vs. Bunds, reversing some early tightening. The widening came alongside Euro Stoxx equity indices moving off best levels.
• Gilts bull flatten, with cash yields running 2-7bp lower on the day.
• Geopolitical strains centred on the Midde East and a heavy start to the week for Chinese & HK equities were touted as supportive factors for FI markets earlier today.
• However, S&P 500 e-mini futures have rallied alongside core global FI markets (aided by the move lower in Tsy yields).
• A steady, albeit slowed (vs. early to mid-Jan run rates) stream of global IG issuance has done little to derail the bid in core global FI markets.