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EGBs-GILTS CASH CLOSE: Gilts Underperform As OAT Spreads Retighten

BONDS

Core European curves bull flattened Wednesday, largely paring Tuesday's losses.

  • Early gains were cued by a dovish RBNZ hold overnight.
  • Gilts underperformed Bunds: comments by BoE Chief Economist Pill drew a hawkish UK rate market reaction as he didn't provide an explicit signal for an August cut.
  • Periphery / semi-core EGB spreads reversed some of Tuesday's widening, alongside an equity rebound.
  • 10Y OAT/Bund tightened 2bp to 65bp, even as political developments appeared to make it less likely that a centrist majority coalition would be formed.
  • Thursday's focus will be the US inflation report, but that's preceded by UK GDP and final German CPI data.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

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Core European curves bull flattened Wednesday, largely paring Tuesday's losses.

  • Early gains were cued by a dovish RBNZ hold overnight.
  • Gilts underperformed Bunds: comments by BoE Chief Economist Pill drew a hawkish UK rate market reaction as he didn't provide an explicit signal for an August cut.
  • Periphery / semi-core EGB spreads reversed some of Tuesday's widening, alongside an equity rebound.
  • 10Y OAT/Bund tightened 2bp to 65bp, even as political developments appeared to make it less likely that a centrist majority coalition would be formed.
  • Thursday's focus will be the US inflation report, but that's preceded by UK GDP and final German CPI data.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

Keep reading...Show less