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EGB/Gilts: Inflation Concerns Continue To Bite

BOND SUMMARY

Equities and sovereign bonds are under pressure again from lingering inflation concerns, further fueled by yesterday's strongest that expected US CPI print.

  • Gilt yields are 1-3bp and the curve is 2bp steeper.
  • The bund curve has similarly bear steepened with the 2s30s spread 2bp wider on the day.
  • OAT yields have pushed up 1-3bp.
  • BTPs have underperformed core EGBs with yields 3-6bp higher and the curve 2bp steeper.
  • Supply this morning came from Italy (BTPs, EUR9.25bn) and Ireland (IGBs, EUR1.5bn).

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