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Addition To Previous Bullet


Won Reverses Early Gains


A Little Flatter


Futures Little Changed, Curve A Little Steeper


Long Weekend In Japan

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A huge debut 10-Yr NextGenerationEU syndication set a bearish tone for Tuesday's session, with core FI weaker in a broadly risk-on session.

  • Bunds sold off as it was announced the NGEU size would be the maximum E20bln, which was double most expectations (on books >E142bln).
  • Apart from that we had bond supply from the UK (Gilts, GBP7.75bn), Germany (Schatz, EUR4.068bn allotted) and Finland (RFGBs, EUR1.417bn).
  • Gilts traded mixed; Periphery spreads tighter.
  • UK employment / earnings data impressed; final CPIs carried no surprises.
  • Wednesday sees UK May inflation data, Gilt / Bund supply, and the US Fed decision.

Closing German/UK Yields And 10-Yr Spreads To Germany

  • Germany: The 2-Yr yield is up 0.1bps at -0.672%, 5-Yr is up 1.2bps at -0.603%, 10-Yr is up 1.9bps at -0.232%, and 30-Yr is up 1.5bps at 0.322%.
  • UK: The 2-Yr yield is up 0.9bps at 0.08%, 5-Yr is up 1.7bps at 0.331%, 10-Yr is up 1.7bps at 0.758%, and 30-Yr is down 0.2bps at 1.276%.
  • Italian BTP spread down 1bps at 102bps / Spanish spread down 0.3bps at 64.1bps