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MNI Credit Weekly: Le Vendredi Noir
EGB/Gilt: Geopolitical Risks Trigger Risk-Off Move
European government bonds have rallied alongside broad equity selling with the escalation in the Ukraine crisis underpinning the risk-off move.
- European leaders continue diplomatic efforts to defuse the crisis. German Chancellor Olaf Scholz is in Kyiv today to discuss the crisis, while UK PM Boris Johnson has indicated that he will be holding further talks with world leaders to find a way of bringing Russia "back from the brink of war".
- The gilt curve has bull flattened with the 2s30s spread narrowing 7bp.
- Bunds have remained bid through the morning with cash yields 7-10bp lower on the day.
- It is a similar story for OATs with yields down 7-9bp.
- BTPs have slightly underperformed core EGBs with yields 5-6bp lower.
- Supply this morning came from Germany (Bubill, EUR2.886bn allotted). Later today France will offer EUR4.7-5.9bn of BTFs.
- There was no tier one European data this morning.
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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.