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CROSS ASSET

Risk-On Fulled By US Infra Spend

GILTS

Opening calls

SOUTH AFRICA

SAGBs Firm at the Open, Risk Premia Ease W/W

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Gilts turned bid on the weak US growth number, upending what had been a relatively directionless session for UK govies.

  • Cash yields are now 2-3bp lower on the day with the belly of the curve slightly underperfomring. Last yields: 2-year 0.0184%, 5-year 0.3019%, 10-year 0.7620%, 30-year 1.2997%.
  • The Jun 21 gilt future trades at 125.50, 23 ticks above yesterday's close.
  • The construction PMI for April came in below expectations (61.6 vs 62.1) while indicating still rapid expansion in activity.
  • The ruling Conservative party won a historic by-election in the Labour stronghold of Hartlepool, highlighting the severe difficulties that the opposition party is facing in presenting a credible election challenge in the Tories.