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EGB/Gilt - Gilt future outperforms EGBs

BONDS
  • Another wide trading session for EGBs and Bund, but moves have once again been more gradual.
  • UK CPI beat set out the tone early on, and EGBs continue to trade at their lower end of their ranges, but 50 ticks off the low for Bund at the time of typing.
  • Peripheral spreads are mixed, and close to flat overall.
  • Italy is 2bp tighter, and Spain is 0.9bp wider.
  • Gilt future is outperforming EGBs, and back in the green at the time of typing.
  • The Gilt/Bund spread is again tighter, by 4.8bps, and now eyeing the next support at 160.00bps.
  • Better is seen towards 154.24bps, the 50% retrace of the July/September widening.
  • Looking ahead, BoE Mann, ECB Visco, Fed Evans, Bullard are still schedule to speak.

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