Free Trial

EGBs-GILTS CASH CLOSE: US CPI Crushes European Front End

BONDS

European short-end bonds sold off sharply Friday afternoon, on a higher-than-expected US CPI reading that boosted near-term global rate hike expectations.

  • The UK and German curves bear flattened: markets are now pricing in 160bp in ECB hikes the rest of the year (+11bp on the session) and 179bp from the BoE (+10bp).
  • UK 2Y yields now have a 2-handle for the first time since 2008, while Schatz neared 1%.
  • Periphery spreads continued to sell off post-ECB, 10 BTP reaching a fresh post-May 2018 wide.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany:

  • Germany: The 2-Yr yield is up 13.6bps at 0.971%, 5-Yr is up 13.4bps at 1.329%, 10-Yr is up 8.6bps at 1.516%, and 30-Yr is up 3.3bps at 1.659%.
  • UK: The 2-Yr yield is up 19.1bps at 2.046%, 5-Yr is up 18.1bps at 2.144%, 10-Yr is up 12.4bps at 2.447%, and 30-Yr is up 7.9bps at 2.57%.
  • Italian BTP spread up 7.4bps at 224.7bps / Greek up 18.8bps at 288.1bps

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.