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Core FI moving higher on China Covid concerns

BONDS
  • Core FI this morning is being driven by Covid-concerns in China. As well as the disruption to global supply chains that this could cause, there are also concerns that this could lead to a fall on the demand-side. This is leading to oil prices coming under pressure with both Brent and WTI around $4/bbl lower on the day (WTI falling below the psychological $100/bbl).
  • 2-year UST and Schatz yields are both down 5.2bp since Friday's close while there has been a parallel move in the German curve and a small flattening of the UST curve.
  • Eurozone peripheral spreads are generally marginally wider on the day with the exception of France with OAT-Bund spreads around 0.7bp tighter following Macron's victory in the Presidential election.

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