[MARKET ANALYSIS] Fixed is contained overall, despite Ifo pressure and subsequent energy-driven upside

Fixed benchmarks saw some modest pressure in the first part of the APAC session, before lifting in the early European morning and then falling again on data, pressure that was unwound shortly after by energy action. Throughout this though, USTs traversed a c. six tick range, and sub-30 for Bunds, and both ultimately unchanged on the day. The mentioned overnight pressure sent USTs to a 108-11 base, holding above Monday's 108-08+ trough. Since, the benchmark has been as high as 108-16, and is holding flat on the day a tick or two off that high. Recent upside a function of energy pressure, as sources report that the US told Pakistan to tell Iran that it would halt the siege and lift sanctions under the MOU, if Hormuz opens and proxy attacks stop. We now await an update from Iran, who are said to be consulting and are expected to respond soon. Ahead, USTs look to 2yr supply, in addition to a handful of data points. Bunds in-fitting with the above, just with a slightly larger range. The overnight base was 123.76, since taken out by two ticks just after the cash equity open and into Ifo where the stronger-than-expected series sparked some fresh downside. In more recent trade, the discussed energy pullback has allowed Bunds to lift back into the green, but only by a tick or two. Next up, we have Schatz supply. Gilts in-fitting with the above, as UK specifics are light. Firmer by a tick or two in 86.02-35 parameters, awaiting 2033 auction results.