EGB/Gilt: Waiting On The Fed

European government bonds broadly opened lower this morning before starting to recover losses. Regional equities and lower while performance in FX has been mixed on the day.

• Focus today will be on the FOMC, with the market expecting officials to ramp up the fight against inflation with a 50bp policy rate hike.
• European Commission President Ursula von der Leyen proposed an EU-wide import ban on Russian oil.
• Spanish Services and Composite PMIs for April were a touch better than expected, as was the case for the Italian Services PMI.
• Supply this morning came from Germany (Green Bund, EUR1.464bn allotted), Greece (GTBs, EUR625mn) and the Eurozone (Bills, EUR2.491bn).
• Gilt yields have started to recover lost ground, albeit with cash yields across most of the curve still 1-2bp above yesterday's close.
• Bunds have reversed sharply having initially opened lower. Yields are now 1-2bp higher on the day.
• The OAT curve has twist flattened on the day with the 2s30s spread narrowing 3bp.
• It is a similar story for BTPs where the curve is now 6bp flatter