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EGBs-GILTS CASH CLOSE: Recovering Early Losses Pre-Fed


A bit of bear steepening in both the UK and German curves Wednesday, ahead of the US Fed decision and Italian supply Thursday.

  • Bunds and Gilts weakened early, but pared losses in the afternoon.
  • ECB's Lagarde and Schnabel (among others) made comments this afternoon but nothing really different from what we've heard before. No reaction in bond markets, and although the EUR appreciated sharply this was seen as a dollar-led move.
  • Beyond the Fed Wednesday evening, Thursday sees April eurozone flash inflation data and BTP supply.

Closing yields/10-Yr Spreads to Bunds:

  • Germany: The 2-Yr yield is up 0.3bps at -0.685%, 5-Yr is up 1.5bps at -0.584%, 10-Yr is up 1.8bps at -0.231%, and 30-Yr is up 1.9bps at 0.311%.
  • UK: The 2-Yr yield is down 0.6bps at 0.059%, 5-Yr is up 1.2bps at 0.356%, 10-Yr is up 2.3bps at 0.797%, and 30-Yr is up 1bps at 1.311%.
  • Italian BTP spread up 3.2bps at 110.2bps / Spanish down 0.1bps at 66.4bps

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