July 27, 2022 10:57 GMT
European government bonds have traded weaker this morning alongside gains for equities and G10 FX vs the US dollar as markets await the FOMC meeting later today.
- Gilts have sold off with the curve bear steepening. Cash yields are up 3-6bp while the 2s30s spread has widened 1bp.
- Bund yields are now 3-4bp higher on the day.
- OAT yields are similarly up 3-4bp.
- BTPs have significantly underperformed core EGBs with spreads widening. Cash yields are 4-11bp higher with the belly of the curve leading the charge.
- Supply this morning came from the UK (Gilts, GBP700mn), Germany (Bund, EUR3.298bn allotted), Italy (BOTs, EUR6bn) and Greece (GTBs, EUR625mn).
- Ahead of the FOMC decision, US durable goods orders data will be published.