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EGB/Gilt: Schnabel Echoes Lagarde's Inflation Risk Comments

BOND SUMMARY

European sovereign bonds trade mixed this morning and have not materially departed from Friday's closing levels.

  • Gilts firmed early in the session, but subsequently trade back towards the Friday close.
  • The bund curve trades close to flat on the day.
  • It is a similar story for OATs, which have so far lacked clear direction.
  • The ECB's Isabel Schanbel stated that long-term bottlenecks could lead to higher inflation and that this was being monitored diligently. Schnabel's comments echo President Lagarde, who last week acknowledged the risk of higher inflation.
  • President Lagarde will participate in a discussion with the Financial Times' Martin Wolf at 1430GMT today.
  • Supply this morning came from Germany (Bubills, EUR3.867bn). Later today France will offer EUR5.6-6.8bn) of BTFs.
  • The European data slate was light this morning with not tier one releases.

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