GERMAN DATA: Truck Toll Index Points Towards July IP Recovery

SFIU5 96.00p with SFIZ5 96.05p, sold the strip at 5.5 in 4k.

Gilts tick higher alongside German & U.S. paper.

• Futures +10 at 91.71 vs. early highs of 91.83.
• Bears are in technical control. Initial support at yesterday’s low (91.42), while initial resistance comes in at yesterday’s high (91.98).
• Yields flat to 2bp lower, curve a little flatter.
• 2s10s registered the highest close since April yesterday (75.8bp), while 5s30s registered the first close above 140bp since ’17, but the spread is back below that level this morning.
• Continued digestion of the global trade/tariff backdrop and related ongoing negotiations between various countries and the U.S. continue to garner much of the macro focus.
• Meanwhile, the fragile fiscal situation continues to dominate domestically, with yesterday’s OBR release reaffirming well-documented areas of concern, likely factoring into the curve steepening seen on the day.
• The release of the BoE’s FSR headlines the UK calendar today, but shouldn’t reveal much in the way of meaningful, fresh information surrounding the future path of monetary policy.
• Elsewhere, the DMO will come to market with GBP4.5bln of the 4.50% Mar-35 gilt.
• Macro and cross-market matters should dominate for much of the day.

ERZ5 98.31/98.43cs, sold at 2.75 in 16k.