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Late '23 Favourites Remain Under Pressure

BONDS

{EU}{GB} BONDS: No let up in the early new year themes thus far today, with late ’23 favoured positions (long bonds and received core global central bank OIS) under pressure.

  • Bund futures deal around worst levels of the day, last -75, with next support coming in at the 2.20% yield equivalent (135.29 today). German yields are 3.5-7.0bp firmer on the day, with the curve bear flattening.
  • Semi-core EGB spreads to bunds are little changed to marginally wider, while the periphery comes under slightly more pronounced widening pressure.
  • Gilt futures have a look below 100.00, with bears looking to expose the technical air pocket highlighted earlier. Cash gilt yields are 6.5-10.0bp higher on the day, with 10s leading the weakness on the curve.
  • The previously highlighted U.S. data provides the most notable scheduled event risk from here.
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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