Free Trial

EGB/Gilt: UK Slides Into Recession


European government bonds have traded lower this morning alongside gains for equities and the dollar vs G10 FX.

  • Data published this morning confirmed that the UK economy slipped into recession during the second quarter with GDP contracting 0.1% Q/Q (a touch better than expected)) with monthly data showing a 0.6% M/M drop in June.
  • Gilts sold off earlier in to the session and despite reclaiming some ground, continue to trade below yesterday's close. Yields are up 2-4bp with the longer end of the curve underperforming.
  • Supply this morning came from the UK (UKTBs, GBP3.5bn).
  • The bund curve has marginally bear steepened with the 2s30s spread widening 2bp.
  • The OAT curve has similarly slightly steepened.
  • BTP yields are up 1-4bp.
  • US import/export prices for July and the preliminary University of Michigan consumer confidence update for August will be published later today.

To read the full story



MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.