December 30, 2024 17:08 GMT
BONDS: EGBs-GILTS CASH CLOSE: Year Winds Down With Modest Gains
BONDS
European curves leaned modestly bull flatter Monday.
- Bunds and Gilts gained fairly steadily throughout the session, regaining ground from Friday's sell-off.
- There was no clear upside driver in the morning session, though gains ramped up in the afternoon as equities fell and the USD gained in an apparent risk-off move, while US MNI Chicago PMI came in below-expected.
- Spanish flash December inflation came in above-expected (core 2.6% Y/Y vs 2.4% survey), but there was little market reaction with the main national readings not released until next week.
- ECB's Stournaras eyed gradual rate cuts but that bigger reductions "shouldn't be ruled out" if inflation cooperates.
- Periphery EGB spreads widened by a little under 1bp as equities fell. French OATs underperformed peers, with 10Y spreads widening 2bp.
- As per usual on New Year's Eve, Tuesday's schedule is light, with Irish flash inflation the main scheduled highlight, and widespread market closures in Europe until Thursday.
Closing Yields / 10-Yr EGB Spreads To Germany
- Germany: The 2-Yr yield is down 1.8bps at 2.082%, 5-Yr is down 3.6bps at 2.154%, 10-Yr is down 2.9bps at 2.367%, and 30-Yr is down 3bps at 2.597%.
- UK: The 2-Yr yield is down 1.2bps at 4.453%, 5-Yr is down 1.3bps at 4.394%, 10-Yr is down 2.2bps at 4.611%, and 30-Yr is down 0.9bps at 5.173%.
- Italian BTP spread up 0.8bps at 115.5bps / French OAT up 2.1bps at 83.3bps
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