Free Trial

EGBs-GILTS CASH CLOSE: Short-End/Belly Retrace Recent Losses

BONDS

Gilts and Bunds partially recovered Friday's losses in Monday trade, gaining some traction late in the session after a weak start.

  • While poor German factory data had little positive impact on core FI, the afternoon rally looked Treasury-led, with 10Y yields pulling back on speculation Fed QT would be tapered soon, and amid a sharp drop in oil prices.
  • The short-ends/bellies of the UK and German curves outperformed, following their relative underperformance late last week.
  • Periphery spreads tightened modestly as risk assets gained, with SPGBs outperforming. Italy announced a 7/30Y BTP dual-tranche syndication.
  • On Tuesday we get German industrial production and Eurozone/Italian labour market data, with supply from the Netherlands, Austria, and the UK, and with Belgium and Italy announcing syndications today.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

  • Germany: The 2-Yr yield is down 2bps at 2.548%, 5-Yr is down 2.7bps at 2.075%, 10-Yr is down 2bps at 2.136%, and 30-Yr is down 1bps at 2.366%.
  • UK: The 2-Yr yield is down 2.7bps at 4.215%, 5-Yr is down 2.6bps at 3.73%, 10-Yr is down 1.5bps at 3.772%, and 30-Yr is down 1bps at 4.386%.
  • Italian BTP spread down 1.2bps at 168.3bps / Spanish down 1.4bps at 98.1bps

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.