EGB/Gilt - Semi core underperform

Bund has recovered from its lows, as we head onto the weekend.

EGBs, semi core underperforms and bounce have been somewhat limited.

Peripheral are all wider, beside Greece, trading flat against the German 10yr.

US Michigan, From the report: All components of the expectations index improved this month, particularly among low and middle income consumers.

With continued declines in energy prices, the median expected year-ahead inflation rate fell to 5.0%, its lowest reading since February.

The share of consumers blaming inflation for eroding their living standards remained near 48%.

Gilt/Bund spread broke 110.00bps handle, widest since 25th March.

Next small resistance will be seen at 112.48bps, 61.85 short term retrace of the March/May tightening.

Spread is now at 111.00bps.

Looking ahead, after markets ratings:

Moody’s on Germany (current rating: Aaa; Outlook Stable)

S&P on Switzerland (current rating AAA; Outlook Stable) and Hungary (current rating: BBB; Outlook Stable)

DBRS Morningstar on Belgium (current rating AA (high); Negative Trend).