Fixed Income: firmer, but well off best levels

Bunds have derived a degree of support from weaker than expected Eurozone ip data, but are still only mid-range between 157.41-67 Eurex parameters having pulled back relatively sharply from the high. It seems that intraday and/or longer term longs were unsettled by the fact that the 10 year future held below the March peak in early exchanges, while a recovery in EU equities has also diminished the safe-haven allure of core bonds. However, Gilts are retaining modest outperformance after Tuesday’s Spring Budget around the 121.50 mark vs 121.60 at best and a 121.41 base, while US Treasuries remain firm and in bull-flattening mode ahead of retail sales and PPI data. Back to Eurozone debt, some underperformance in the periphery and Spanish Bonos especially, with Portuguese and long end German supply looming, and despite a raft of mainly dovish ECB commentary.