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EBG/Gilt - UK Inflation set the tone for the day

BONDS
  • EGBs and Bund have continued to fall during the afternoon session.
  • The tone was set following the UK inflation beat on the European open.
  • The move in the UK dragged Global bond and rate futures lower.
  • UK 10yr Yield trades at the highest level since the end of June.
  • Gilt/Bund spread has widened by 7.2bps, and at highest level since 16th March at 122.1bps.
  • Next resistance is seen at 124.11bps.
  • European peripheral spreads are all wider and Italy has led, by 6bps against the German 10yr.
  • BTP/Bund is testing the next resistance at 222.53bps.
  • Looking ahead, tomorrow sees Australia employment, Norway GDP, EU final CPI.
  • Gilt futures are down -1.60 today at 114.26 with 10y yields up 17.4bp at 2.297% and 2y yields up 25.2bp at 2.389%.
  • Bund futures are down -1.33 today at 154.20 with 10y Bund yields up 11.0bp at 1.079% and Schatz yields up 14.9bp at 0.712%.
  • BTP futures are down -1.58 today at 125.15 with 10y yields up 16.8bp at 3.297% and 2y yields up 18.2bp at 1.577%.
  • OAT futures are down -1.17 today at 143.41 with 10y yields up 11.4bp at 1.651% and 2y yields up 13.4bp at 0.600%.

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