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AUSSIE 3-YEAR TECHS

(Z1) Incline Accelerates

ASIA

Coming up in the Asia-Pac session on Friday:

MNI

Coming up in the Asia-Pac session on Friday:

USDCAD TECHS

Needle Still Points North

BONDS

Core FI had a positive day, with initial steepening giving way to bull flattening in the German curve (and to a lesser extent in the UK where 10s outperformed). Once again there were few catalysts to point to, but weaker equities and higher US real rates / lower inflation breakevens post-Fed minutes Wednesday proved enough impetus.

With risk appetite waning, BTP spreads drifted wider in afternoon trade, 10-Yr closing above 140bps/Bunds for the first time this week.

A big day for data lies ahead Friday, with UK retail sales kicking things off, and flash August PMIs throughout the morning. Closing levels:

  • Germany: The 2-Yr yield is down 0.6bps at -0.675%, 5-Yr is down 1.8bps at -0.689%, 10-Yr is down 2.4bps at -0.496%, and 30-Yr is down 3.6bps at -0.071%.
  • UK: The 2-Yr yield is down 0.9bps at -0.034%, 5-Yr is down 0.6bps at -0.03%, 10-Yr is down 1.1bps at 0.225%, and 30-Yr is down 0.6bps at 0.808%.

10-Yr Periphery EGB Spreads:

  • Italian BTP spread up 2.5bps at 141bps
  • Spanish bond spread up 2.3bps at 78.7bps
  • Portuguese PGB spread up 2bps at 82.2bps
  • Greek bond spread up 2.5bps at 159.1bps