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EGB/Gilt: Bull Flattening

BOND SUMMARY

European sovereign bonds have rallied this morning and curve have bull flattened alongside broad weakness in equities.

  • Gilt yields are 1-3bp lower on the day with the curve 2bp flattter.
  • German bonds have marginally outperformed with long end yields 4bp lower.
  • The OAT curve has bull flattened with the 2s30s spread 2bp flatter.
  • BTPs have been grinding higher through the morning with cash yields now 2-4bp lower.
  • Supply this morning came from Germany (Bund, EUR1.73bn allotted), Italy (BTP/BTPei, EUR4.75bn).
  • The French business confidence series produced by INSEE jumped to 108 for May from 95 the previous month and above the 98 consensus.
  • UK PM Boris Johnson's controversial former advisor Dominic Cummings has heavily criticised the government over its handling of the coronavirus crisis in a parliamentary hearing today.

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