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EGB/GILT: The follow-through from......>

BOND SUMMARY
BOND SUMMARY: EGB/GILT: The follow-through from yesterday's Merkel-Macron joint
press conference has been the dominant theme driving EGBs this morning. Although
question marks remain over whether the likes of Austria and the Netherlands will
eventually support the E500bn recovery fund, the marked improvement in
Franco-German coordination on the politically sensitive issue of financing
COVID-19 fiscal measures has been positive for periphery-core spreads.
- Bunds have weakened with cash yields broadly 1-2bp higher on the day.
- Italian BTPs have rallied sharply with the short-end outperforming.
2-/3-/5-year yields are up 6-7bp.
- Data published for the UK revealed an unsurprising surge in jobless claims in
April, with the remainder of the labour market data for March not yet showing
the full impact of the lockdown.
- Gilts have sold off and the curve is a touch steeper. Current yield levels:
2-year -0.0042%, 5-year 0.0842%, 10-year 0.2651%, 30-year 0.6816%.

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