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EGBs-GILTS CASH CLOSE: BTPs Gain As Risk Appetite Stabilises

BONDS

Core bond yields continued to fall Tuesday but closed a bit off session lows. The UK and German curves bull flattened, but BTPs led the charge, with 10Y yields falling as much as 21bp as risk appetite stabilised following Monday's broader market rout.

  • Bundesbank chief Nagel said he supported a July rate hike, while saying he was skeptical of addressing eurozone fragmentation with a new tool.
  • Periphery EGBs did little on those typically hawkish Nagel comments, with 10Y BTP spreads having already bounced higher from session lows below 200bp.

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

  • Germany: The 2-Yr yield is down 6.4bps at 0.165%, 5-Yr is down 7.7bps at 0.691%, 10-Yr is down 9.3bps at 1.002%, and 30-Yr is down 9.2bps at 1.142%.
  • UK: The 2-Yr yield is down 6.4bps at 1.329%, 5-Yr is down 9.5bps at 1.484%, 10-Yr is down 10.8bps at 1.848%, and 30-Yr is down 10.3bps at 2.056%.
  • Italian BTP spread down 5.5bps at 200bps / Greek down 2.4bps at 250.8bps

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