[MARKET ANALYSIS] Two-way action for fixed but benchmarks are in relatively proximity to unchanged ahead of supply

A bearish start to the day has given way to a slightly mixed session as the morning progresses and broader market benchmarks move.
USTs in the red, lower by just under 10 ticks as it stands, but a few ticks off worst levels. Specifics for the space have been a little light in the early hours, with the market focused primarily on geopolitics and reporting around the Iranian Supreme Leader; see Commodities for a full breakdown.
As it stands, USTs in 110-16 to 110-29 confines, awaiting Flash PMIs for timely insight into how the Middle East situation is impacting the US economy; a point that may be of note as domestic focus turns increasingly to the midterms. Elsewhere, the docket features 2yr supply.
Bunds are now nearly unchanged. Started the day lower by 21 ticks, hitting a 125.24 trough as yesterday's move retraced. Thereafter, the benchmarks lifted in the mid-morning alongside a modest bounce in peers. More recently, a bout of fresh pressure has been seen on Flash PMIs that point to a stagflation environment for the bloc, and one where price pressures are already evident.
Gilts started on the front foot, got to an 88.17 high early doors, as while the benchmark hadn't fully acknowledged the bearishness in fixed seen late-US/early-APAC, the narrative had by the open reverted back to one of modest fixed upside as the energy space came under pressure once again. More recently, Flash PMIs for the UK also point to stagflation, as inflationary pressure "surged" while growth has "stalled". A dynamic that underscores the difficult balancing act the BoE has at the moment, given a desire to avoid a return to price upside, but the already precarious labour and growth narrative factor against tightening.
A narrative that we might get some insight into via Chief Economist Pill this afternoon, who appears at a banking event and is expected to provide a text.