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BONDS: EGBs-GILTS CASH CLOSE: Gilts Outperform As Supply, Energy Weigh On EGBs

BONDS
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Gilts outperformed Bunds Tuesday, with curves leaning bear steeper.

  • Multiple factors weighed on European instruments starting in early trade. They included lingering US tariff concerns, higher oil and gas prices, and heavy sovereign supply (Italy the EU, the Netherlands, and Germany.)
  • Not to be outdone on the latter, the UK saw a record-sized 10Y Gilt syndication and orderbook.
  • BoE's Mann set a hawkish tone in the UK rates space by noting that her vote for a 50bp cut in February doesn't necessarily mean that she will vote for a 50bp cut in the upcoming meetings.
  • The German curve bear steepened, with the UK's seeing underperformance in the 5-10Y segment.
  • Periphery EGB spreads widened slightly in defiance of stronger equities, with BTPs underperforming.
  • Wednesday's calendar includes Italian industrial production data, with appearances by BOE's Greene and ECB's Nagel - reminder that ECB's Elderson participates in an MNI Webcast. Global attention will be on US inflation data released in the European afternoon.

Closing Yields / 10-Yr EGB Spreads To Germany

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Gilts outperformed Bunds Tuesday, with curves leaning bear steeper.

  • Multiple factors weighed on European instruments starting in early trade. They included lingering US tariff concerns, higher oil and gas prices, and heavy sovereign supply (Italy the EU, the Netherlands, and Germany.)
  • Not to be outdone on the latter, the UK saw a record-sized 10Y Gilt syndication and orderbook.
  • BoE's Mann set a hawkish tone in the UK rates space by noting that her vote for a 50bp cut in February doesn't necessarily mean that she will vote for a 50bp cut in the upcoming meetings.
  • The German curve bear steepened, with the UK's seeing underperformance in the 5-10Y segment.
  • Periphery EGB spreads widened slightly in defiance of stronger equities, with BTPs underperforming.
  • Wednesday's calendar includes Italian industrial production data, with appearances by BOE's Greene and ECB's Nagel - reminder that ECB's Elderson participates in an MNI Webcast. Global attention will be on US inflation data released in the European afternoon.

Closing Yields / 10-Yr EGB Spreads To Germany

Keep reading...Show less