Yields Hold Lower On The Day Post-Schnabel, Fresh Dovish Extremes Seen In ECB Pricing

Pullbacks from best levels in core global FI markets remain fairly contained after the early bid derived from the dovish communique given by ECB Executive Board member Schnabel.

• Still, firmer than expected Eurozone and UK PMIs, coupled with consumer inflation expectation readings from the same regions, helped cap the early rally.
• ECB-dated OIS prices the best part of 145bp of rate cuts through ’24 on the whole, after registering a fresh cycle dovish extreme post-Schnabel.
• In terms of general curve moves, the German curve bull flattens, the wings of the gilt curve lag the rally seen elsewhere on the curve and the U.S. Tsy curve sees a light bull flattening.
• A move away from best levels in crude oil futures will have aided bonds at the margin.