COMMODITIES: Crude Rallies On Iran Tensions, Gold Gains

European curves bear flattened Monday, with periphery / semi-core EGBs outperforming.

• A tentative trade war truce between China and the US saw Bund and Gilt yields gap higher at the start-of-week reopen as equities soared in relief.
• Bear steepening was the order of the day, as ECB/BOE rate cuts were priced out, pressuring the short end.
• Elsewhere, headlines from the BOE Watchers' conference were prevalent following last week's 3-way split (ultimately 5-4 in favour of a 25bp cut).
• Lombardelli called the decision to cut 25bp "finely balanced"; Greene said she would still have voted for a 25bp cut if she knew about the US and UK/China trade developments; Taylor, who had voted for a 50bp cut, noted that he could reconsider support for lower rates if "there was a surprising amount of progress on the international trade war situation".
• Bunds underperformed Gilts. Periphery / semi-core spreads narrowed by around 2bp across the board.
• Tuesday's agenda includes UK labour market data - MNI's preview is here. We also get US CPI data.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is up 12.8bps at 1.913%, 5-Yr is up 12.3bps at 2.222%, 10-Yr is up 8.6bps at 2.648%, and 30-Yr is up 6.2bps at 3.081%.
• UK: The 2-Yr yield is up 9.2bps at 4%, 5-Yr is up 9.9bps at 4.126%, 10-Yr is up 7.6bps at 4.643%, and 30-Yr is up 4.5bps at 5.391%.
• Italian BTP spread down 1.8bps at 102.9bps / French OAT down 2.3bps at 68.1bps  
   

RRP usage inches up to $147.505B this afternoon from $142.272B Friday, total number of counterparties at 34. Usage had fallen to $54.772B last Wednesday, April 16 -- lowest level since April 2021. Conversely, usage had surged to the highest level since December 31, 2024 on Monday, March 31: $399.167B.

• MNI: US APR TREASURY BUDGET $258.4B