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EGBs-GILTS: Second Thoughts On Thursday's Rally

BOND SUMMARY

Bunds have nearly fully retraced all of Thursday's sharp gains in early Friday trade, though Gilt futures remain well above Thursday's opening level. Bear steepening in both curves, vs Thursday's bull flattening

  • Nothing catalysing the move in particular. Equities stronger (FTSE 100 > 7,000 for the first time since the pandemic started); EUR outperforming GBP.
  • Only scheduled speakers are BOE's Cunliffe and Woods at 1000BST.
  • A light European data calendar, with Eurozone Mar inflation at 1000BST being the final reading. No bond issuance either (just UK bills). DMO announced JLMs for 30-Yr Gilt syndication at end-Apr.
  • France and the UK see ratings reviews this evening; attention already on ECB meeting next week.

Latest levels:

  • Jun Bund futures (RX) down 44 ticks at 170.89 (L: 170.81 / H: 171.31)
  • Jun Gilt futures (G) down 42 ticks at 128.4 (L: 128.36 / H: 128.59)
  • Jun BTP futures (IK) down 33 ticks at 148.24 (L: 148.22 / H: 148.59)
  • Italy / German 10-Yr spread 0.2bps tighter at 101.9bps

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