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Modi, AMLO Top Major Economy Leader Poll, Macron Last


Under Pressure


Trend Condition Remains Bearish

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Gilts significantly underperformed Bunds Thursday, with bear steepening in the curve. Supply and rate hike reconsiderations were the session's themes.

  • France (E7.5bln) Spain (E5bln) and UK Green (GBP6bln) provided the supply, helping weigh on the space. Euribor and Short-Sterling futures weakened a few ticks after Wednesdays move higher.
  • Further down the curve, 10Y Gilt yields touched a fresh post-2019 high. 10s30s flattening in Germany was notable (that segment now at the flattest since the pandemic started in March 2020).
  • Periphery spreads saw little change.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

  • Germany: The 2-Yr yield is up 1.2bps at -0.646%, 5-Yr is up 4.1bps at -0.432%, 10-Yr is up 2.5bps at -0.101%, and 30-Yr is down 1.8bps at 0.273%.
  • UK: The 2-Yr yield is up 2.5bps at 0.709%, 5-Yr is up 4.6bps at 0.864%, 10-Yr is up 5.4bps at 1.202%, and 30-Yr is up 5.6bps at 1.443%.
  • Italian BTP spread up 0.3bps at 104.3bps / Spanish down 0.4bps at 62.6bps