BONDS: EGBs-GILTS CASH CLOSE: Sizeable Bull Steepening On US Tariffs
Apr-03 18:26
Core European FI soared with semi-core/periphery spreads widening Thursday in a flight-to-safety move.
- The dominant force throughout the session was Wednesday evening's US tariff announcement, which proved much harsher on global trading partners than expected overall.
- Equities fell sharply, boosting rate cut pricing globally and driving a bid for core bonds.
- Weak US Services ISM data deepened the risk-off sentiment, and yields would close near the session lows.
- Curves bull steepened. 2Y German yields saw their lowest close since early December, with UK 2s lowest since October.
- Periphery instruments couldn't keep up with the Bund rally, with Iberian paper underperforming (SPGBs/PGBs around 3bp wider of Bund).
- Looking ahead, Friday's data slate includes German factory orders.
Closing Yields / 10-Yr EGB Spreads To Germany
- Germany: The 2-Yr yield is down 9bps at 1.948%, 5-Yr is down 9.5bps at 2.233%, 10-Yr is down 7bps at 2.651%, and 30-Yr is down 3bps at 3.042%.
- UK: The 2-Yr yield is down 15.9bps at 4.01%, 5-Yr is down 16.3bps at 4.094%, 10-Yr is down 12bps at 4.52%, and 30-Yr is down 6.6bps at 5.184%.
- Italian BTP spread up 2.6bps at 112.1bps / Spanish up 2.9bps at 65.3bps
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GERMANY: EURUSD Pops to Fresh Session Highs Following Merz Comments
Mar-04 18:24
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- "SPECIAL FUND TO BE PRESENTED NEXT WEEK"
- "ECONOMY MUST BE BROUGHT BACK ON GROWTH PATH, WTIH CREDIT FINANCED SPECIAL FUND WORTH 500 BLN EUROS"
- "500 BILLION EUROS FUND FOR INFRASTRUCTURE, 100 BLN EUROS OF IT WILL GO TO STATES"
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US TSY FUTURES: BLOCK: Jun'25 10Y Sale
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