OIL: CDU Rates at China’s State-Owned Refineries Fall

Curves bull flattened Wednesday, with Gilts modestly outperforming Bunds ahead of Thursday's BOE decision announcement.

• Early trade saw some bull steepening led by Gilts after UK CPI data looked in line with expectations.
• There was a broad rally across core FI for almost the entire remainder of the session however, with the long end leading gains.
• The main triggers were weak-leaning US data (jobless claims and residential construction), with lower oil prices as US President Trump seemingly views a near-term resolution on the Iran-Israel conflict.
• The German and UK curves both bull steepened on the day. Periphery/semi-core EGB spreads were little changed.
• Overnight focus will be on the US Federal Reserve, but the BOE takes centre-stage Thursday - MNI's preview is here.
• It would be a surprise to markets if the outcome is anything other than an on hold decision with unchanged official guidance. Expectations are relatively strongly pointing towards a 7-2 vote split for a hold/cut respectively.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is down 2.6bps at 1.842%, 5-Yr is down 3.8bps at 2.103%, 10-Yr is down 3.8bps at 2.497%, and 30-Yr is down 4.1bps at 2.944%.
• UK: The 2-Yr yield is down 3.5bps at 3.888%, 5-Yr is down 4.7bps at 4.006%, 10-Yr is down 5.5bps at 4.495%, and 30-Yr is down 5.4bps at 5.229%.
• Italian BTP spread down 0.2bps at 95bps / French OAT unchanged at 71.5bps  

• Similar to this week's underlying themes, stocks gained as wires reported that Iran had reached out to Pres Trump to discuss a ceasefire with Israel. Support gradually eased after Iran denied the call: Iranian officials posted on social media: "Iran does NOT negotiate under duress, shall NOT accept peace under duress, and certainly NOT with a has-been warmonger clinging to relevance."
• Currently, the DJIA trades up 173.38 points (0.41%) at 42389.47, S&P E-Minis up 25.5 points (0.42%) at 6063.75, Nasdaq up 115 points (0.6%) at 19636.09.
• Leading gainers included Coinbase Global climbing 6.51% after a Stablecoin bill cleared the Senate, Enphase Energy +4.81% and Nucor +3.71%, Jabil +3.83%, Intel +3.61.
• Conversely, insurance and financial services retreated: Allstate Corp -3.47%, Progressive -3.06%, Visa -2.81%, while oil and gas shares retreated as crude scaled back a fraction of Tuesday's rally (WTI -0.74 at 74.10): Halliburton -2.87% and CF Industries Holdings -2.50%

• US TSY TO SELL $76.000 BLN 13W BILL JUN 23, SETTLE JUN 26