EU CREDIT SUPPLY: EDP: IPT

SX5E (15th Aug) 4900p, bought for 4.70 in ~8.4k.

TY Weekly Option, Friday NFP Expiry:

• TY 111p, bought for '22 in ~5.11k.

Gilts follow Bunds higher, with a lack of meaningful domestic news flow leaving macro and cross-market cues at the fore.

• Futures trade as high as 91.85, last +27 at 91.74.
• Initial resistance at the 20-day EMA (91.92) goes untested.
• Initial support comes in at the July 24 low (91.18).
• The recent recovery from lows has stalled a bearish move.
• Yields 0.5-3.5bp lower, curve bull flattens.
• 2s10s and 5s30s still don’t move too far from 75bp & 140bp, respectively.
• GBP STIRs see a modest dovish shift given the bid in the long end.
• SONIA futures flat to +2.0, BoE-dated OIS pricing ~46bp of cuts through year-end.
• GBP750mln medium bucket sales from the BoE’s APF are due today.
• Elsewhere, focus will fall on macro matters (any ongoing adjustment to the U.S.-EU trade deal and Sino-U.S. discussions in Stockholm).
• Slightly further out, final UK manufacturing PMI data is due Friday, with nothing in the way of BoEspeak scheduled until next week’s monetary policy decision. The overwhelming consensus looks for a cut at that meeting.
• On the supply front, the DMO will sell GBP5bln of 4.375% Mar-28 paper tomorrow and GBP300mln of the 3.75% Jul-52 gilt on Wednesday.