Today, European sovereign yields are breaking out of a consolidation pattern in a sign of waning demand for safety.
The charts speak for themselves as it's a consistent move from west to east.
UK 10s:
French 10s:
Italian 10s are up 8 bps today in the largest jump since June:
Bunds have broken out of the recent consolidation pattern:
US 10s are still near the lower end of the range but are up 4.5 bps today in the second day of selling. Today we also get $69 billion in 2s for sale, followed by 5s and 7s in the subsequent two days.
There isn't a good explanation for what is driving these moves as the only data we got today was German GfK consumer sentiment at -22.0 compared to -18.2 expected. I think the calendar could be a factor on rebalancing flows or some other quirk.
Keep a close eye on Treasuries today.
