[MARKET ANALYSIS] Fixed income firmer despite energy being in the green, though off best; Powell ahead

Despite crude still being firmer, fixed income has managed to benefit from crude easing off best levels, with both energy and debt benchmarks in the green, departing from the recent inverse correlation.
In short, the weekend saw a further escalation of rhetoric, but there was no 'final blow' or similar from the US, while reporting around a ground invasion continues, however, reports suggest US President Trump is leaning against such action. Since, a handful of ballistic missiles have been fired by Iran while US positions in various nations have been subject to attempted drone strikes.
Overnight, JGBs hit a contract low of 129.82, but then bounced back above the handle and last week's 130.06 close. A rebound that occurred after remarks from FX diplomat Mimura and BoJ Governor Ueda; both officials focused on FX, with Mimura outlining that action may be needed if the situation continues, while Ueda said they are monitoring FX closely.
Bunds hit a 124.48 low early doors, matching Friday's close. Since, the benchmark has been gradually but notably making its way higher, to a 124.88 peak with gains of 40 ticks at best. Though, a short-lived bout of pressure was seen as German State CPIs lifted from the prior, as indicated by mainland consensus; figures due at 13:00BST. More recently, no move to a jump in consumer and selling price expectations.
USTs in-fitting. Hit a 110-04 trough, lower by two ticks at worst. Since, USTs have rebounded to a 110-17+ peak. Ahead, the docket is headlined by Fed Chair Powell, who is scheduled to speak at Harvard University. Commentary that will be scrutinised for which side of the dual-mandate the Fed is currently most concerned about, and any hints as to whether action should be expected in the near-term.
As is typically the case, Gilts are directionally following peers, but magnitudes are slightly larger. To an 87.60 peak with gains of nearly 50 ticks at best. Specifics for the UK light, awaiting to see what action the government and/or BoE may take to deal with the energy shock.