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EGB/Gilt - Yield unwind

  • EGBs and Bund have continued to bounce off the morning session low, and not even a US PPI beat changed the trend.
  • Desk continued to square and take profit heading towards the end of the EU session, with the ECB in mind, and the long Bank Easter holiday weekend.
  • Volumes remains quite poor, with RM likely on the sidelines.
  • Peripheral spreads are mixed, Spain is 1.2bp wider, and Italy 2.5bps tighter
  • .The trend in Gilts remains and underperforms Bund, a follow through post the morning UK CPI beat.
  • But similarly, some locking profits, after the huge moves higher in yield we have had in Global Bonds.
  • Gilt/Bunds spread sits 2.6bps wider.
  • Looking ahead, most of the focus turns to the ECB tomorrow.
  • Gilt futures are down -0.09 today at 119.40 with 10y yields up 0.7bp at 1.809% and 2y yields down -0.7bp at 1.492%.
  • Bund futures are up 0.43 today at 155.79 with 10y Bund yields down -2.2bp at 0.766% and Schatz yields down -0.8bp at 0.061%.
  • BTP futures are up 0.69 today at 134.78 with 10y yields down -4.2bp at 2.364% and 2y yields down -2.8bp at 0.422%.
  • OAT futures are up 0.45 today at 147.97 with 10y yields down -3.0bp at 1.265% and 2y yields down -4.3bp at 0.092%.

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