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EGB/Gilt: Mixed Trading

BOND SUMMARY

European government bonds have traded mixed this morning while equities have pushed higher and the US dollar has posted broad gains against G10 FX.

  • Gilts have traded weaker this morning with yields up 1-3bp.
  • The bund curve has slightly bear flattened with the 2s30s spread narrowing 2bp.
  • The OAT curve has marginally twist flattened with the 2s30s spreading trading down 1bp.
  • BTPs have lacked clear direction while trading broadly firmer on the day.
  • The ECB's Ignazio Visco has stated that a rate adjustment could come in Q3 or by end-year.
  • German regional CPI data for April has been mixed with some states reporting an acceleration from the previous month and others a deceleration. The national estimate will be published at 1300GMT.
  • Elsewhere, the preliminary April estimate for Spanish inflation came in below expectations (8.3% Y/Y vs 9.0% expected).
  • Focus shifts to the first estimate of US Q1 GDP later today.

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