Tsys Help Global Core FI To Firm A Little After U.S. CPI, UK Front End Still Sharply Cheaper

Core global FI markets take their cues from U.S. Tsys post-CPI, which allows Gilts to move away from session cheaps, with the early bear flattening bias on that curve moving to a state of twist flattening. The well-documented hawkish BoE repricing flagged earlier is also back from session extremes, but terminal rate pricing remains notably firmer on the session, showing between 5.75-5.80% at typing.

• German Bund futures have a look through yesterday’s high as they register best levels of the session.
• The German curve now bull flattens after twist flattening earlier, with 30s richening by ~5bp on the session.
• In the Eurozone periphery, BTPS outperform at the 10-Year point in the wake of the U.S. CPI data.