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Watching The 50-Day EMA


Bearish Focus


Updated Barclays/Bbg Extension Estimates for US


Late Session Selling

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The recent bull flattening in core European FI accelerated Monday, with longer-end yields having one of their best sessions since March 2020.

  • Though there was no data or bond issuance Monday, risk-off was the order of the day, with equity indices dropping 2-3% and periphery spreads wider. Fears of COVID resurgence restraining the recovery was the proximate trigger, with the move accelerating as US traders came in.
  • While the move faded a bit in the last two hours of cash trade, we still closed at post-Feb 2021 lows for 10Y Bund and Gilt yields.
  • New BoE MPC member Mann said she doesn't expect currently high inflation to persist.
  • On Tuesday, ECB's Villeroy speaks, while Germany sells E4bln of Bund and UK sells GBP1.25bln of Oct-71 Gilt.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

  • Germany: The 2-Yr yield is down 0.7bps at -0.691%, 5-Yr is down 2bps at -0.656%, 10-Yr is down 3.3bps at -0.386%, and 30-Yr is down 4.4bps at 0.088%.
  • UK: The 2-Yr yield is down 3.7bps at 0.081%, 5-Yr is down 5.2bps at 0.276%, 10-Yr is down 6.6bps at 0.56%, and 30-Yr is down 8.2bps at 1.031%.
  • Italian BTP spread up 3.9bps at 109.9bps / Spanish up 2.3bps at 66.3bps