EU FINANCIALS: JyskeBank: FV (€500m WNG 11.5NC6.5 Tier 2)

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. 

Bloomberg Bonds:

• US Tsys: +0.06yr (Small).
• EU Govies: +0.09yr (Decent).
• UK Govies: +0.22yr (HUGE).

• A quick turnaround for the Estoxx Futures (VGU5), back at session lows, the Opening gap would be down to 5390.00, but not a good technical study to use for these type of contracts.
• The Price action has dragged the Cash SX5E under 5400.00, but the pace is more limited for now.
• The EUR is coming under some small pressure, testing the intraday low against the USD, CAD, TRY, CHF, JPY and GBP.
• Some of the Risk Off in the past few minutes is dragging the AUD at session low, but the Dollar bid has also been a driver so far Today.