May 06, 2022 16:03 GMT
An apparent hawkish turn from influential ECB members applied fresh pressure on European FI Friday, with rate hike expectations rising and German yields hitting multi-year highs.
- The key comment was from Banque de France's Villeroy who said he sees rates in positive territory by year-end.
- Gilts outperformed, with the short-end continuing to rally post-dovish BoE.
- 10Y Bund yields rose to the highest since Aug 2014.
- 10Y BTP spreads rose only slightly but closed above the 200bp mark for the first time since April 2020.
Closing Yields / 10-Yr Periphery EGB Spreads To Germany
- Germany: The 2-Yr yield is up 3.5bps at 0.32%, 5-Yr is up 8.5bps at 0.851%, 10-Yr is up 8.8bps at 1.132%, and 30-Yr is up 7bps at 1.241%.
- UK: The 2-Yr yield is down 4.1bps at 1.506%, 5-Yr is down 1bps at 1.66%, 10-Yr is up 3.1bps at 1.995%, and 30-Yr is up 4.8bps at 2.173%.
- Italian BTP spread up 0.9bps at 200.4bps / Greek up 3.6bps at 244.4bps
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