[MARKET ANALYSIS] Fixed income firmer after a weekend of energy action, USTs essentially flat on a US holiday

A firmer start to the week for fixed income, on account of the pressure seen in the energy space on steps towards an energy ceasefire between Russia and Ukraine, while in the Middle East Iran acknowledged that some of the seven points have been met, but not all. Action which leaves Bunds higher by about 20 ticks, off highs in 121.02 to 121.29 confines, with a pullback seen on recent energy gains. Energy aside, the bloc is focused on ongoing budget deliberations, with Politico reporting that Germany is to push for cuts to agriculture and cohesion, two of the most high-profile funding points. Elsewhere, we await the briefing by Chancellor Merz at 12:30BST, where he is expected to outline the changes CDU is making following the poor performance in September’s regional elections. Performance that significantly increased the scrutiny around and pressure on the Chancellor. Gilts opened higher by just under 30 ticks, broadly in line with the lead from peers at the time. Upside was a function of the discussed energy moves, and also increased commentary around EU-UK relations ahead of PM Burnham’s update to the House of Commons this afternoon. However, despite peaking at 84.17 with gains of 50 ticks, the benchmark has waned on a bounce in energy and on increased focus around the budget, as the fiscal task Chancellor Healey faces is significant. Finally, USTs spent the morning with modest gains but have now slipped to modest losses. In narrow c. 10 tick confines on account of the partial US holiday, which sees cash trade closed.