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EGBS/GILTS: Gilts Underperforming Ahead Of US Payrolls

BONDS

German bonds are easily outperforming UK counterparts early Friday, in a reversal of Thursday's price action.

  • Amid relatively few headline/data drivers, the Bund curve is bull steepening, with Schatz yields moving lower alongside the Euro edging toward parity with the USD.
  • UK instruments are underperforming global counterparts and are weaker in parallel across the curve, with yields roughly 1.5bp higher out to 10Y. Weakness has persisted from the open.
  • Periphery EGB spreads are a little tighter
  • Attention is firmly on an appearance by ECB Pres Lagarde at 1255BST, followed by the US employment report at 1330BST.

Latest levels:

  • Germany: The 2-Yr yield is down 7.5bps at 0.483%, 5-Yr is down 7.3bps at 0.904%, 10-Yr is down 4.8bps at 1.27%, and 30-Yr is down 2.2bps at 1.53%.
  • UK: The 2-Yr yield is up 1.5bps at 1.842%, 5-Yr is up 1.4bps at 1.825%, 10-Yr is up 1.5bps at 2.143%, and 30-Yr is down 0.3bps at 2.545%.
  • Italian BTP spread down 4.6bps at 194.5bps

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