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Gilts More Resilient Than Bunds In Wake Of U.S. Data, BoE Pricing Likely Lends Some Support

BONDS

Bunds are more defensive than their UK counterpart in the wake of the U.S. ISM services data, with the light downtick in BoE-dated OIS around the BoE TSC (covered in a previous bullet) seemingly shielding gilts to some degree.

  • Bund futures trade back towards session lows, while gilt futures are closer to best levels than lows.
  • The German curve bear flattens, with paper running 1-7bp cheaper.
  • The UK curve sees 1.5-3.5bp of richening, with the wings still outperforming.
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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