Free Trial

EGBs-GILTS CASH CLOSE: Yields Continue To Bounce

BONDS

EGBs and Gilts sold off amid a risk asset relief rally Tuesday, as concerns over US banking stability abated vs the panic of the prior two sessions.

  • Risk / swap spreads fell sharply, with periphery EGBs outperforming (10Y BTPs closed 8bp tighter to Bunds) as equities rallied.
  • Bunds and Gilts fell to session lows after the highly anticipated US CPI reading was on the strong side, but traded sideways/higher for the rest of the session.
  • The German curve bear flattened with Schatz yields up more than 20bp as ECB hike pricing continued to recover ground. A 50bp hike on Thursday is back to 70% probability, vs 30% at Monday's low.
  • Expectations for a BoE hike later this month remain uncertain after this morning's mixed jobs data was not enough to sway the MPC in any particular direction: current implied pricing is about 65% for a 25bp hike vs a pause.
  • Wednesday's Europe calendar highlight is the UK budget announcement - MNI's preview is here.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

  • Germany: The 2-Yr yield is up 20.2bps at 2.892%, 5-Yr is up 18.4bps at 2.512%, 10-Yr is up 16.1bps at 2.42%, and 30-Yr is up 13.4bps at 2.41%.
  • UK: The 2-Yr yield is up 11.8bps at 3.481%, 5-Yr is up 11.5bps at 3.392%, 10-Yr is up 11.8bps at 3.488%, and 30-Yr is up 5.9bps at 3.894%.
  • Italian BTP spread down 7.9bps at 184.5bps / Greek down 13.1bps at 191.3bps

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.