TARIFFS: US And Chinese Trade Teams To Meet Within Seven Days - Navarro

Large Weekly 5yr downside Option:

• FVA (weekly, expiry 12th May) 107.25p, bought for 00+ in ~42.4k.

Gilts hold the bulk of the rally detailed earlier, backing away from session highs over the last couple of hours after the post-auction momentum stalled.

• Futures have traded as high as 93.32, well shy of next resistance at the May 2 high (93.93). Last 93.24.
• Yields 2-5bp lower on the day, ~1bp off session lows, flattening bias maintained, last week’s yield lows intact/unchallenged across the curve.
• 2s10s ~13bp below closing cycle highs, 5s30s ~8bp below closing cycle highs.
• Spread vs. Bunds continues to oscillate in the 195-200bp closing range witnessed over the last 3 sessions
• Domestic headline flow remains limited, with external cues set to dominate between now and tomorrow’s BoE decision.

• Bund is still probing Monday's high of 131.24 (circa 2.5% in Yield), all very gradual, but Volumes have picked up a little, Schatz was bought in 10k, Bobl 5k.
• While extreme moves should still be limited ahead of the Fed, further upside traction opens to 131.71, followed by Friday's gap, up to 131.90 and the big one at 132.03.
• In Yield terms, next support comes at 2.43%, which equates to 132.01, close to that 132.03 level.