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EGBs-GILTS CASH CLOSE: Steady Rally

BONDS

European bonds rallied for most of Monday's session following some weakness at the open, amid light trading volume with holidays in several countries (including France, Germany, Italy, and Spain).

  • The fall in yields came amid a sharp drop in oil prices (Brent -4%) and unexpectedly weak economic data overnight in China and in the afternoon from the US.
  • Apart from the steady drop in yields throughout the session, there were few key themes: German yields outperformed the UK in the short-end/belly, but the converse was true further down the curve.
  • No bond issuance (back Tuesday w Gilt and Bobl auctions), key data (UK employment and German ZEW feature Tuesday), or central bank speakers.
  • Greek debt underperformed, with the 10Y spread to Bunds nearly 4bp wider (other periphery EGB spreads were relatively unchanged).

Closing Yields / 10-Yr Periphery EGB Spreads To Germany:

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European bonds rallied for most of Monday's session following some weakness at the open, amid light trading volume with holidays in several countries (including France, Germany, Italy, and Spain).

  • The fall in yields came amid a sharp drop in oil prices (Brent -4%) and unexpectedly weak economic data overnight in China and in the afternoon from the US.
  • Apart from the steady drop in yields throughout the session, there were few key themes: German yields outperformed the UK in the short-end/belly, but the converse was true further down the curve.
  • No bond issuance (back Tuesday w Gilt and Bobl auctions), key data (UK employment and German ZEW feature Tuesday), or central bank speakers.
  • Greek debt underperformed, with the 10Y spread to Bunds nearly 4bp wider (other periphery EGB spreads were relatively unchanged).

Closing Yields / 10-Yr Periphery EGB Spreads To Germany:

Keep reading...Show less