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Moving in lock-step with the German curve this morning

  • The gilt curve is moving in lockstep with the German curve this morning, despite some very strong data overnight in the form of the REC jobs report.
  • This showed that vacancies and wages are rising further, in further evidence that the labour market continues to tighten. However, it is questionable whether this will really have any impact on the MPC's decisions as real wages continue to remain under pressure given the high levels of inflation (which will be exacerbated in April from the energy price cap rise) and from the NIC rise (with the relief announced by Chancellor Sunak only coming into place in July).
  • 2y yields down -0.5bp today at 1.449%, 5y yields down -1.3bp at 1.501%, 10y yields down -1.3bp at 1.715%, 30y yields down -1.2bp at 1.850%.
  • 2s10s down -0.8bp today at 26.6bp, 10s30s up 0.2bp at 13.6bp

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