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German Front End Outperforms As ECB Speak Points To June Cut

BONDS

Core global bonds look through the weakness in JGB futures/hawkish BoJ speculation, with rallies extending a little.

  • ECB Governing Council rhetoric has indicated a growing consensus re: a June cut, while some of the centrists leave an April cut on the table (dovish for markets).
  • A 25bp cut is now fully discounted through the June meeting, while ~5bp of cuts are priced through the April decision.
  • The front end of the German curve outperforms UK & U.S peers as a result, with Schatz yields ~5.5bp lower on the day.
  • German curve bull steepens.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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