Track USTs Lower Following US NFP Beat

Core/semi-core EGBs follow USTs lower in the wake of the US labour market data, where headline payrolls exceeded expectations.

• Bunds are -42 ticks at 132.32 after reaching a post-data low of 132.16, leaving the first support untouched at 131.87 (April 2 low).
• 10-year periphery spreads to Bunds widened on release with equities coming under pressure, but the moves largely faded. The 10-year BTP/Bund spread is still 2.7bps wider today at 141.2bps.
• Euribor futures are -1.0 to -6.0 ticks through the blues.
• ECB-dated OIS contracts remain within recent ranges, with 24bps of cuts priced through the June meeting and 89bps priced through the remainder of ’24.
• Our policy team’s latest sources piece highlighted that there are still divisions amongst the Governing Council as to whether a clear easing path should be signalled at upcoming meetings. See here for the full piece.