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10Y Spreads At July Tights, June Lows In Sight

BTP
The Bund rally has stalled a little, giving BTP spreads a little more scope to tighten, mirroring the drop in ECB hike pricing this morning.
  • 10Y Italian yields are outperforming periphery peers and have dropped to their lowest levels of the month at 4.025% (-12.8bp) with spreads vs Bunds at the tightest since June 28, down 5.3bp on the day at 162.1bp (see chart).
  • Still some way to go before the mid-June low of 152.1bp but well down from the July high of 177.3bp.

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