Fixed Income: more fuel for bond bulls, and BTP bears

Bunds and Gilts have both advanced further amidst the broadly risk-off environment and with extra incentive from the more pronounced sell-off in crude, while the former will also be keeping note of Italian debt as Roman Government officials and their EU peers continue to wrangle over budget issues, ahead of Tria’s showdown with Centeno. Bunds are just off a 159.82 peak and Gilts have eased off 121.59 (+45 and +41 ticks respectively), while BTPs are closer to the bottom end of a 121.41-122.10 range vs yesterday’s 122.05 close. Elsewhere, US Treasuries are back in bull-flattening mode following the Fed and looking towards PPI data before Michigan sentiment and wholesale trade.