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Opinion polling ahead of the 12 May regional election in Catalonia continues to show the centre-left pro-union Socialists' Party of Catalonia (PSC) - the sister party to PM Pedro Sanchez's national PSOE - maintaining its lead. The two main pro-independence parties - the populist Junts per Catalunya (Junts) and the leftist Republican Left of Catalonia (ERC) - look set to come in second and third place respectively.

• An average of seat projections based on polling in May shows the pro-union parties with a total of 69 seats, compared to 67 for the pro-independence parties. It remains to be seen whether either bloc can form a workable minority/coalition administration after the election.
• Exiled former Catalan President Carles Puigdemont is campaigning from across the border in southwest France as he seeks to lead the next gov't at the head of the Junts party. He remains subject to an arrest warrant, but this is set to be overturned by the end of the month with the passage in Madrid of an amnesty for those involved in the illegal 2017 independence referendum.
• A divisive post-election period in Catalonia also risks the stability of Sanchez's minority gov't. The administration is reliant on the support of Junts, and should Puigdemont pull the party's support amid rancorous negotiations after the vote it could jeopardise Sanchez's already-shaky hold on power.

Source: ElectoPanel, FeedBack, Data10, KeyData, SocioMetrica, GESOP, Cluster17, YouGov, GAPS, GAD3, NC Report, Sigma Dos, DYM, IMOP, 40dB, Target Point, Hamalgama Metrica, Celeste-Tel, MNI

Gilts remain underpinned on the day. Softer-than-expected German factory orders data and the RBA decision provided some spill over support after the long London weekend.

• Softer-than-expected BRC retail sales data may also have factored in, although that release isn’t usually a major market mover.
• The rally in futures breached the 50-day EMA (95.65) before running out of steam ahead of round number resistance (97.97 high), to last trade +85 at 97.81.
• Wider core global FI markets also move away from best levels.
• The bearish technical picture remains in place for the contract, although bulls have negated some of the short-term technical threat on the break above the 50-day EMA.
• Cash gilt yields are 5-8bp lower across the curve, with 10s and 30s leading the rally.
• Local headline flow has been fairly limited since the gilt open.