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USDCAD TECHS

Needle Still Points South

US TSYS

Yields Bounce as Equities Make New Monthly Highs

AUDUSD TECHS

Heading North

EURJPY TECHS

Bull Rally Accelerates

COLOMBIA

Economists Survey Raises 2021 CPI Forecast To 4.9%

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The UK and German curves bear steepened Tuesday, with BTPs underperforming the European FI space as risk appetite was clawed back again.

  • Skyrocketing European energy costs and US dollar strength were underlying themes.
  • Gilts disconnected from sharp weakness in GBP, with the bond market more focused on the hawkish BoE. 10Y Bunds printed a -0.174% high, but Gilt/Bund spread eyeing 2019 high (just above 121bp). All that said, cash yields finished off the session highs.
  • A few ECB speakers today, including Kazimir who set off a brief EURUSD spike (but not much fixed income response) saying the ECB wouldn't automatically boost APP when PEPP ends.
  • UK sold GBP2bln 30Y Gilt, Netherlands E4.9bln Jan-29 DSL.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

  • Germany: The 2-Yr yield is up 0.6bps at -0.683%, 5-Yr is up 1.1bps at -0.549%, 10-Yr is up 2.4bps at -0.199%, and 30-Yr is up 1.4bps at 0.264%.
  • UK: The 2-Yr yield is up 2.3bps at 0.409%, 5-Yr is up 3.2bps at 0.628%, 10-Yr is up 4.2bps at 0.994%, and 30-Yr is up 5bps at 1.325%.
  • Italian BTP spread up 3.7bps at 105.4bps / Spanish up 0.7bps at 64.1bps