May 20, 2022 16:13 GMT
German bonds outperformed their UK counterparts Friday, with steepening in both curves - though periphery weakness took centre stage.
- With no particular catalyst evident, periphery spreads widened sharply: 10Y BTPs out 10bp to close above 200bp (though just shy of the May high); GGBs underperformed, nearly 18bp wider and starting to threaten the April 2020 wides.
- Gilt and Bund yields faded earlier highs in the afternoon as stocks came off their highs. UK underperformed as BoE hike pricing rose following stronger-than-expected data this week and analyst hike projection upgrades.
Closing Yields / 10-Yr Periphery EGB Spreads To Germany:
- Germany: The 2-Yr yield is down 3bps at 0.342%, 5-Yr is down 3.7bps at 0.655%, 10-Yr is down 0.5bps at 0.944%, and 30-Yr is up 4.6bps at 1.116%.
- UK: The 2-Yr yield is up 1.6bps at 1.507%, 5-Yr is up 1.7bps at 1.603%, 10-Yr is up 2.8bps at 1.893%, and 30-Yr is up 3.6bps at 2.13%.
- Italian BTP spread up 10bps at 205.5bps / Greek up 17.8bps at 277.7bps
10Y GGB / Germany Spread, bpSource: BBG, MNI
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