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EGB/Gilt: Risk Off Amid China Lockdowns & Inflation Concerns

BOND SUMMARY

European government bonds have rallied while equities and commodities have broadly pushed lower amid concerns about fresh lockdowns in China and persistent inflationary pressure.

  • The gilt curve has bull steepened with cash yields down 4-8bp.
  • Bunds opened higher this morning with yields now down 4-8bp from the Friday close and with the belly of the curve outperforming.
  • It is a similar story for OATs where yields have pushed down 4-7bp on the day.
  • BTPs have lagged the rally in core EGBs with yields down 2-4bp,.
  • Supply this morning came from Germany (Bubills, EUR4.192bn) and Belgium (OLOs, EUR3.814bn).

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