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Now On The Defensive, BTPS Widen Vs. Bunds After Last Week’s Tightening

EGBS

A relatively brisk start to the week for €IG supply (outside of sovereigns) adds to the impetus from the news of the Blinken-Xi meeting, pressuring Bunds.

  • Bund futures more than reverse the early uptick to sit -30 or so, after registering fresh session lows. Meanwhile, the German cash curve sees 1bp of richening to 3bp of cheapening, twist steepening, pivoting around the 5-Year zone.
  • 10-Year Bund yields are ~1bp off of 2.50%, a level that has only been closed above on 6 occasions since the U.S.-bank driven vol. in March.
  • Similar twist steepening moves were seen across most of the EGB curves, albeit to varying degrees.
  • BTPS widen by ~3bp vs. Bunds on the move, after last week’s well-documented tightening. Spanish paper widens ~1bp vs. Bunds, while the Portuguese and Greek equivalents are little changed vs. Bunds.
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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