EGB/Gilts SUMMARY

A busy session for EGBs and core Bonds.

• Bund price action was mostly led by US treasuries, as the Suez canal is now free, Global trade outlook has been taken positively in the markets and as such EGBs came under pressure.
• Bund has now dropped some 160 ticks from yesterday's high. German 5/30s traded through March high, but we have since faded off the best levels, with more pressure in the shorter end 3 months to 2yr.
• Peripherals have mainly traded in tandem with Bund, albeit a little tighter, with Greece leading at 2.2bps
• Similar price action was seen in the Gilts, with the contract lower, Global trade set to resume and the UK slowly re-opening, as well as vaccination pace has kept a lid on futures.
• US Treasuries were the clear leading market this morning, dragging EGBs and Gilts lower, in turn pushing yields higher.
• The US 10yr yields edged towards levels last seen since 22/01/2020.
• We are nearing that decent resistance area at 1.7811% (50% retracement of Nov 2018-March 2020 fall)
• US 10yr printed 1.7742% high.
• Looking ahead, German national CPI, and US Consumer Confidence are the notable data.
• Speakers, sees Fed Quarles, Williams,ECB Centeno and Riksbank Ingves