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Gilt And Bund Bear Steepening Continues

BONDS

Bunds and Gilts continue to head lower, with bear steepening extending. No "news" driving but comes alongside US Tsy weakness / dollar strength with US data on the strong side and Fed rate pricing firming (unlike ECB and BoE which is unchanged).

  • Front Bund futures last down 74 ticks at 133.65, a fresh post-Mar 15 low - next support comes in at 133.33 (Low Mar 15).
  • Gilts last 101.77, off 44 ticks on the day and a new post-Mar 10 low. Next support seen by our tech analyst at 101.12 (76.4% retracement of the Feb 28 - Mar 20 rally).
Cash curves:
  • Germany: The 2-Yr yield is up 0.9bps at 2.89%, 5-Yr is up 4bps at 2.513%, 10-Yr is up 5bps at 2.49%, and 30-Yr is up 5.6bps at 2.563%.
  • UK: The 2-Yr yield is up 0.2bps at 3.62%, 5-Yr is up 0.9bps at 3.517%, 10-Yr is up 2.6bps at 3.693%, and 30-Yr is up 2.9bps at 4.05%.

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