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German Short End Weaker As Hike Pricing Ticks Up Post-Lane

ECB

The German short end is weakening heading into the cash close, with 2Y yields up 2+bp since the top of the hour.

  • This coincides with ECB terminal hike pricing up a similar magnitude, to near session highs, following the comments by ECB's Lane affirming a May hike baseline (though noting the decision would be data-dependent).
  • Possible though doubtful that Lane's commentary merited the (admittedly small) bearish move, especially as the May pricing didn't really change that much.
  • Though with Lane pointing out its importance, it puts more focus on the ECB's Bank Lending Survey in a couple of weeks.

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