EU DEBT LATEST: Bunds extending their outperformance

It’s been a slow, stealthy grind higher rather than a stop-fuelled rally, but nevertheless the 10 year German bond has extended gains on the day and vs core fixed peers. The Eurex high so far is 157.33, +35 ticks and above last Friday’s session best, with 157.36 now within striking distance and if breached with enough gusto the March peak at 157.69 could be targeted. Conversely, Gilts have dipped to a marginal new Liffe low at 121.19, -5 ticks vs +13 ticks at best, and despite market polls looking for a low DMO remit as a result of tomorrow’s Spring Budget. Note, US Treasuries are holding a flattening bid ahead of the upcoming refunding, including bills, 3 and 10 year paper.