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Bulls Pause For Breath


Lead Serial Put Spd


Remains Vulnerable

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Another busy session in terms of volumes for EGBs and Bund.

  • News flow was a lot lighter, and we haven't learnt anyway new from the speakers so far.
  • Bund is better offered but further downside traction has lost some momentum as desk position for the weekend.
  • Peripherals are mixed, Italy has widened by 3.1bps, while Greece sits 0.4bp tighter.
  • Gilts have underperformed vs the Bund, given the surprising Hawkish BoE yesterday.
  • Regarding the Gilt/Bund, we are 1bp tighter, and some investors have also faded some of the widening bias in the Gilt Bund spread, after we tested highest level since March 2019.
  • Looking ahead, Fed Powell, Clarida, Bowman, George, Bostic, BoE Tenreyro.
  • After markets, Ratings from Fitch on Belgium, S&P on Germany, DBRS on Finland.
  • Gilt futures are down -0.32 today at 126.13
  • Bund futures are down -0.53 today at 170.17 with 10y Bund yields up 3.7bp at -0.222% and Schatz yields up 0.4bp at -0.691%
  • BTP futures are down -0.88 today at 152.86 with 10y yields up 6.6bp at 0.786% and 2y yields up 2.5bp at -0.477%
  • OAT futures are down -0.63 today at 166.48 with 10y yields up 4.4bp at 0.117% and 2y yields down -0.6bp at -0.699%.