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Japanese MOF sells Y4.9024tn 3-Month Bills:


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A busy back-and-forth session ended with Gilt and Bund cash trading cheaper/more expensive to end the week.

  • The space was hit early in the session when in a BBG interview, ECB's Kazaks floated the possibility of a slowdown in PEPP purchases in June. Periphery spreads widened.
  • Then the afternoon brought a shocking downside miss in US employment gains in April, pushing core global FI much higher. Then, in another twist, talk of of seasonal adjustment factors unduly impacting the reading led to a bearish reversal.
  • In the end, yields were little changed on the session, with Gilts outperforming.
  • In supply, Belgium sold E0.5bln of OLOs via ORI auction.

Closing yields/10-Yr Spreads to Bunds:

  • Germany: The 2-Yr yield is up 0.5bps at -0.686%, 5-Yr is up 1.2bps at -0.587%, 10-Yr is up 1bps at -0.215%, and 30-Yr is up 1bps at 0.351%.
  • UK: The 2-Yr yield is down 0.6bps at 0.033%, 5-Yr is down 2.1bps at 0.313%, 10-Yr is down 1.7bps at 0.775%, and 30-Yr is down 0.4bps at 1.314%.
  • Italian BTP spread up 3.8bps at 118bps / Spanish spread up 2bps at 70.2bps