ECB: Lagarde: Direction Of Travel Clear Unless Surprises; All Meetings Live

• Back-end Euribor contracts are leading today’s rise, while the whites lag the broader move. The ERZ6/Z8 spread has edged down slightly from yesterday’s highs and is hovering around 54bp.
• The correlation with Z8 implied yields continues to display the strong positive directionality seen in recent months, reflecting the broader macro shift toward pricing higher structural rates at the back end of the curve.

0NZ6 95.30/95.50/95.70/95.90c condor, bought for 5 in 4k.

We note above that we may have to wait until the next full election manifesto is released to get the full answers on how a National Care Service would be funded - and while the initial move lower in gilts during Burnham's announcement could signal concern over unfunded spending, we see the end of the triple lock and building expectations for tax hikes as preventing any further fallout for gilt prices at these levels.

• We’ve seen how the market behaves amid rising concerns of unfunded fiscal moves in recent years (Kwarteng-Truss, Starmer-Reeves budgets), and the market reaction then was much more violent relative to today's 25 tick drop before stabilising.
• Cross-market moves (Treasuries away from lows and spillover from U.S. data) also noted in more recent trade.