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EGB/Gilts: Govies Gain Ground As Equities Struggle

BOND SUMMARY

European sovereign bonds have rallied this morning with EGBs outperforming gilts and equities still under pressure.

  • Gilts yields have edged down 1-2bp with the curve marginally flatter.
  • The UK fuel crisis continues to rumble on alongside continued warnings of goods shortages later in the year which has stoked concerns about a slowdown in growth.
  • The bund curve has bull flattened with the 2s30s spread 2bp narrower.
  • OAT yields are broadly 1-3bp lower on the day.
  • BTPs have slightly outperformed core EGBs with cash yields 2-4bp lower and the curve 1-2bp flatter.
  • Supply this morning came from the UK (UKTBs, GBP2bn).
  • The ECBs Isabel Schnabel is due to speak on a panel for a Federal Reserve conference later today.

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