May 28, 2024 09:30 GMT
BONDS: Gilts Off Highs But Remain Firmer; EGBs Slightly Weaker
BONDS
Core/semi-core EGBs sit slightly weaker, with this morning’s corporate and sovereign supply keeping the space under pressure.
- April ECB consumer 3-year ahead inflation expectations were revised a tenth lower to 2.4%, but this was not a market mover.
- Bunds are -8 ticks at 130.28. Last week’s extension lower reinforced a bearish technical cycle, with a break of 132.11 required to re-instate a bullish theme.
- German and French cash yields are slightly higher, while 10-year periphery spreads to Bunds are biased wider, retracing some of yesterday’s compression.
- Gilt futures are off highs, but remain +26 at 97.17 as UK markets caught up with yesterday’s EGB rally upon returning from the long-weekend.
- Gilt yields are -2 to -4bps today, with the curve holding this morning’s bull steepening.
- ECB and BoE-dated OIS remain are little changed on the day.
- ECB’s Centeno and Knot are still scheduled to speak today, while US consumer confidence and UST supply headline this afternoon’s agenda.
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