EGBs/GILTs: A lower-than-expected......>

BOND SUMMARY: EGBs/GILTs: A lower-than-expected CPI print for December (1.3% Y/Y

vs 1.5% survey) and comments from BoE external MPC member Michael Saunders on

the need for fresh stimulus has propelled STIR futures and underpinned the gilt

rally.

- Gilt yields are broadly 5-8bp lower with the belly of the curve outperforming.

Current yield levels: 2-year 0.438%, 5-year 0.423%, 10-year 0.639%, 30-year

1.164%. 

- EGBs have been spurred on by overnight headlines that further US tariff

reductions may not be forthcoming this year. 

- The German bund curve has bull flattened with 2s30s trading down 3bp.

- French OATs have rallied across the curve with yields 1-4bp lower. 

- In Italy, the Constitutional Court set to decide today on the League's

proposal to introduce a first-past-the-post electoral system. BTP yields have

followed EGBs lower. 

- The data calendar is relatively light for the rest of the day.