July 14, 2022 16:12 GMT
The German and UK curves bear flattened Thursday, with Gilts underperforming - though Italian politics stole the show.
- Italy PM Draghi's government won a closely-watched Senate confidence vote, but his future remains uncertain after 5-Star abstained from supporting (a situation which he had previously said would mean the fall of the government).
- BTP spreads fell sharply from intraday highs (closed 207bp, vs 218bp high) going into the close after reports Draghi hadn't submitted his resignation as had been speculated - he's set to hold a cabinet meeting at 1815CET.
- ECB / BoE hike pricing firmed, following Fed 100bp hike speculation overnight post-US CPI, but faded toward session end on comments by FOMC's Waller that pointed to a 75bp raise.
Closing Yields / 10-Yr Periphery EGB Spreads To Germany:
- Germany: The 2-Yr yield is up 6.5bps at 0.523%, 5-Yr is up 3.8bps at 0.874%, 10-Yr is up 3.3bps at 1.178%, and 30-Yr is up 0.3bps at 1.383%.
- UK: The 2-Yr yield is up 16.4bps at 1.962%, 5-Yr is up 7.8bps at 1.833%, 10-Yr is up 4.1bps at 2.101%, and 30-Yr is up 2.9bps at 2.551%.
- Italian BTP spread up 7.1bps at 207.2bps / Spanish up 5bps at 115.8bps
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