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Another session driven by USTs and......>

EGB SUMMARY
EGB SUMMARY: Another session driven by USTs and Italian politics has seen a
sharp sell off in Bunds reverse and then some, with the Jun18 future first off
45 ticks, only to edge higher then jump 28 ticks beginning around 1000GMT.
- No obvious news trigger, though the 10Yr BTPs/Bunds spread exploded higher
after a calm period earlier. Now 5.4bps higher at 156.5bps as BTP yield has shot
5.0bps higher to 2.17%, earlier approaching the Oct-17 high of 2.22%.
- Spanish spreads well-behaved by comparison, with 10Y Bonos/Bunds down 0.3bps
at 80.3bps. Solid auction of Bonos and Oblis this morning, with bid-to-cover of
the 10-year Apr-28 2.25 comparing favourably to 2.09 in the previous auction.
- OATs also participating in the move to safety, with Jun18 futures at 153.09 up
54 ticks from the low, and 7 ticks up on the day.
- A steepening move early in EGBs has turned decisively, with Bunds 2s10s down
from the high of 120.9bps to 117.9bps last, up 0.4bps. 10s30s wider by 1.0bps at
68.7bps.
- Some steepening in Euribor, with greens and blues moving higher 1-1.5 ticks
and whites going nowhere.

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