Free Trial

EGB/Gilt - Focus On ECB This Week

BOND SUMMARY

European bonds have started the week on a soft note, alongside modest upside for equities.

  • Gilts opened lower and have gradually reclaimed the early losses to trade close to unchanged on the day.
  • Bunds similarly opened on a weak footing, before grinding higher through the morning. Cash yields are within 1bp of the Friday close.
  • OATs have steadily firmed through the morning and now trade higher on the day. Last yields: 2-year -0.6126%, 5-year -0.5535%, 10-year -0.0559% 30-year 0.7419%.
  • BTPs have rallied and the curve has bull flattened. Yields are 1-3bp lower on the day.
  • German industrial production data for January came in lower than expected at -3.9% Y/Y vs -3.7% survey. Similarly, Spanish industrial output missed expectations: -2.2% Y/Y vs -0.6% consensus.
  • Supply this morning came from Germany (Bubills, EUR3.859bn allotted).
  • Focus this week is on the Thursday ECB meeting. Although no substantial changes to monetary policy are expected, markets will be paying attention to the ECB's interpretation of the recent bond market sell off and whether there will be any further details on how the GC defines 'favourable financing conditions'.

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.