SOUTH KOREA: Overturn Of Lee's Acquittal Could Upend Election Campaign

Gilts rally alongside peers.

• No clear driver, with a fade of month-end weakness/tariff worry cited by some.
• Futures pierce yesterday’s high and next resistance at 92.17, peaking at 92.27.
• A fresh extension higher would target trendline resistance drawn off the Mar 4 high (92.49).
• The short-term trend outlook in the contract remains bearish, with the recent rally deemed corrective at this stage.
• Yields 4-5bp lower, curve a touch flatter.
• 10s 1bp tighter vs. Bunds at ~193bp.
• SONIA futures dragged higher by the bid in gilts, last 0.5-6.0 higher vs. settlement.
• BoE-dated also sees an extension of the early dovish move, ~53.5bp of cuts priced through year-end vs. ~52bp ahead of the gilt open.
• We have provided a summary of the DMO’s Monday consultation with market participants in a recent bullet.
• Final manufacturing PMI data and comments from BoE MPC member Greene (on UK policymaking/macro conjuncture at 09:15 BST) headline the UK calendar today.

European Commission President Ursula von der Leyen has been speaking in the European Parliament plenary session in Strasbourg regarding the looming 'reciprocal' tariffs from the United States. Livestream of the session here. Says: "We have the power to push back against US tariffs...Tariffs will just fuel inflation, the opposite of what we want to achieve. [...] We are open to negotiations on trade. [...] All instruments are on the table for countermeasures."

• VdL: "We will assess US announcements carefully to give a calibrated response [to tariffs]. The EU has a strong plan to retaliate if necessary and will use it."
• VdL: "Obstacles to the single market hold back businesses in the EU." Says that internal barriers are more damaging to the EU economy than tariffs.
• On 31 March, Politico reported that the EU is considering hitting US services, including major US banks and tech platforms, in a move that would open up a major new avenue of trade confrontation. 

Spain manufacturing PMI slightly missed expectations at 49.5 in March, 0.2 points below both consensus and February's print, but details were mixed:

• Output and employment were marginally higher with "costs rising to the softest degree since last November."
• "Amid widespread reports of uncertainty in product markets affecting demand, new orders declined at a steeper rate and manufacturers reduced inventories in anticipation of lower sales in the months ahead. Confidence in the outlook deteriorated noticeably to its weakest level since last August."