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EGB/Gilt - All the action is in FX

BONDS
  • A mixed session for EGBs and Bund, with peripherals underperforming the Bund.
  • The latter has benefited from safe haven flow, with the EU/Russian energy saga continuing.
  • Main action has been in FX, with the EUR under relentless pressure, while the USD acted as a safer haven currency for the session.
  • Volumes have been average with the street turning to the German CPI tomorrow, and a packed day on Friday that includes French CPI/PPI/GDP, Italian CPI/PPI/GDP, German GDP, and EU CPI/GDP.
  • Peripherals are all wider, with Greece in the lead by 5.2bps.
  • Gilts is also in the red with peripheral, pushing the Gilt/Bund spread wider by 3.6bps.
  • The spread continues to find a base circa 99.00bps, for now.
  • Looking ahead, ECB Lagarde is still due to speak

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