SOUTH AFRICA: April Mining Production Sees Further Contraction

• Since yesterday's close, core fixed income continued higher in early Asian trading before reversing some of these gains ahead of and in early European trading. However, since the gilt open, gilts have ground higher and outperformed USTs and Bunds, but helped to pull them higher (although at the time of writing still off the Asian highs).
• There is no real headline reason for gilts to have moved higher today. We set out some of our thoughts on gilts here. Today sees the opening of parliament (with the Queen's Speech) in which there is expected to be at least some discussion on the NI Protocol - bringing Brexit risks back to UK markets. And MPC member Saunders' speech yesterday indicated that the neutral Bank Rate was between 1.25-2.50% (the lower bound just 25bp away), which suggested that we might start to see even the hawks slow down in terms of their votes for more hikes (or at least pull into question whether we will see any more 50bp votes). We think these reasons could be dragging gilts higher today.
• Focus later today will remain on CB-talk. We are due to hear from Fed's Williams, Barkin, Waller, Kashkari and Mester as well as the ECB's Nagel, Villeroy and de Guindos.
• TY1 futures are up 0-12+ today at 118-18+ with 10y UST yields down -1.3bp at 3.024% and 2y yields up 1.3bp at 2.608%.
• Bund futures are up 0.40 today at 152.14 with 10y Bund yields down -3.0bp at 1.063% and Schatz yields down -2.2bp at 0.202%.
• Gilt futures are up 0.56 today at 118.67 with 10y yields down -6.0bp at 1.894% and 2y yields down -6.2bp at 1.316%.

RXM2 152.50/151.00ps, sold at 63 in 4k (ref 152.29)