US TSYS: Renewed Modest Gains

Bund futures are -35 ticks at 131.75, pressured by this morning 10-year German supply and an uptick in crude oil futures. 

• EGBs have been happy to look through US President Trump’s overnight tariff threats on Auto, Drug, Chip Imports, while the mixed UK CPI report this morning also saw little reaction.
• The German curve has bear steepened, with 2-year yields up 1.5bps and 30-year yields over 3bps higher.
• The 10-year Bund auction was digested smoothly, with the lowest accepted price of 99.77 in excess of the 99.745 pre-auction mid.
• 10-year peripheral spreads to Bunds have extended earlier widening, with European equity futures pulling at typing. The BTP/Bund spread is 1.5bps wider at 107bps, after marking a fresh year-to-date low of 104bps yesterday.
• ECB dove Panetta provided characteristically dovish commentary around weak growth prospects this morning.
• Regional focus remains on Friday’s flash PMIs, while the FOMC minutes headlines today’s global macro calendar.