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EGB/Gilt - Have reversed the rallies

BONDS
  • EGBs and Bund have fully reversed the early European rally, that was driven mostly on the US/China relation concerns, with Nancy Pelosi set to land in Taipei.
  • Bund is back to flat on the session, with some desk likely squaring after Bund rallied as high as 159.70, and tested the 0.70% yield level, printed 0.68% low.
  • Peripheral are all wider, Greece by 6.6bps and Italy by 5.6bps.
  • Gilt is also back to flat on the session, in line with Germany.
  • Gilt/Bund spread is also flat at the time of typing.
  • Looking ahead, Fed Mester and Bullard are still scheduled to speak.
  • Gilt futures are up 0.07 today at 118.96 with 10y yields down -1.1bp at 1.794% and 2y yields down -0.7bp at 1.654%.
  • Bund futures are up 0.14 today at 158.56 with 10y Bund yields down -1.4bp at 0.762% and Schatz yields up 1.7bp at 0.256%.
  • BTP futures are down -0.48 today at 127.73 with 10y yields up 4.0bp at 3.026% and 2y yields up 6.3bp at 1.297%.
  • OAT futures are down -0.19 today at 146.78 with 10y yields up 0.9bp at 1.352% and 2y yields up 5.7bp at 0.209%..

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