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EGB/Gilt: Russia-Ukraine Talks Deadlocked

BOND SUMMARY

European government bonds have firmed alongside weaker trading in equities as the risk respite over the previous two days has subsided.

  • Fresh attempts at bilateral negotiations between Russia and Ukraine have made no tangible progress with Moscow rejecting Ukraine's proposed 'neutrality'.
  • Elsewhere, Western sanctions continue to widen with several high profile Russian oligarchs having their UK assets frozen.
  • Gilts opened lower with the short end continue to make gains through the morning. Cash yields are now down 4-7bp with the curve bull steepening.
  • The bund curve has flattened with the 2s30s spread narrowing 4bp.
  • The OAT curve has similarly flattened 4bp.
  • The BTP curve has twist flattened with the 2s30s spread trading down 3bp.
  • Supply this morning came from Italy (BTPs, EUR6bn), Ireland (IGBs, EUR1bn).

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