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EGBs-GILTS CASH CLOSE: Another Bullish Week Ends On Bearish Note


Thursday's sharp fall in Gilt and Bund yields reversed completely on Friday - but nonetheless FI ended stronger for the 2nd consecutive week.

  • The UK and German long-ends underperformed in a bear-steepening move as the multi-day rally took a breather, no particular macro / headline catalyst seen.
  • In a generally risk-on session, with equities gaining, periphery spreads tightened, though Italian 10Yr spreads didn't quite make up all of Thursday's lost ground vs Bunds.
  • UK May GDP data and Italy May IP data came in weaker than expected.
  • Next week's calendar highlights largely surround the UK: BoE speeches (Bailey and Ramsden) and employment / CPI data.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

  • Germany: The 2-Yr yield is up 0.7bps at -0.676%, 5-Yr is up 0.7bps at -0.596%, 10-Yr is up 1.4bps at -0.293%, and 30-Yr is up 2.3bps at 0.206%.
  • UK: The 2-Yr yield is up 0.2bps at 0.087%, 5-Yr is up 3.1bps at 0.295%, 10-Yr is up 4.3bps at 0.655%, and 30-Yr is up 4.5bps at 1.173%.
  • Italian BTP spread down 1.4bps at 105.6bps / Spanish down 0.8bps at 64.7bps

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