[MARKET ANALYSIS] US yield curve steepens on the Fed independence challenge, supply ahead

Fixed benchmarks in proximity to the unchanged mark.
Overnight, while modest, the bias was downward as the US yield curve steepens over Fed independence concerns and the narrative that a more dovish Fed now could lead to higher inflation and, by extension, higher rates further down the line.
While the independence narrative is nothing new, it has been exacerbated by the subpoena of Fed Chair Powell. Short-end yields are also, potentially, hit by the measure to cap credit card interest rates for one year, a narrative that has weighed heavily on US banking names in the pre-mkt and some European peers with exposure.
USTs at the low-end of a 112-02 to 112-11 band, posting losses of five ticks at most. Support resides at 111-31 from Friday, below that we look to 111-26 from late-August.
By extension, the 10yr yield is at a 4.2% peak, just shy of last Friday's 4.21% high. Thereafter, we return to levels from early-September/late-August when 4.35% printed (18th Aug.).
In Europe, action is much the same. Bunds are near-enough unchanged in 127.82 to 128.05 parameters.
OATs in focus later in the week, see the 08:45GMT update for details.
Gilts opened near-enough unchanged before coming under modest pressure, echoing the above. At the low-end of a 92.30-53 band with downside of 18 ticks at most.