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Core 10y yields over 5bp higher

BOND SUMMARY

Risk-on sentiment continues to wave through the core fixed income market following the unblocking of the Suez Canal. Equities are higher across the board in Europe, but fixed income has seen larger moves. 10y Treasury, Bund and gilt yields are all over 5bp higher on the day. Eurozone semi-core spreads are all narrower but peripheral spreads are little changed.

  • As well as the boost in sentiment from the Suez Canal, data across the Eurozone has also been encouraging. Spanish inflation came in higher than expected with HICP ticking up to 1.2% (0.9% exp) while German state inflation data has also pointed to upside risks for the national print which is due at 13:00GMT/ 8:00ET. Eurozone confidence data all came in better than expected, too.
  • There is not too much on the calendar later outside of US housing and Conference Board consumer confidence data.
  • TY1 futures are down -0-14 today at 130-29+ with 10y UST yields up 5.3bp at 1.763% and 2y yields up 1.2bp at 0.155%.
  • Bund futures are down -0.80 today at 170.82 with 10y Bund yields up 5.4bp at -0.266% and Schatz yields up 1.6bp at -0.698%.
  • Gilt futures are down -0.55 today at 127.55 with 10y yields up 5.3bp at 0.840% and 2y yields up 2.4bp at 0.085%.

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