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Away From Best Levels, Periphery Widens

BTP

While BTP futures had already turned away from best levels alongside Bunds, soundbites from the Italian Economy Minister (no need to redraft budget to comply with EU fiscal rules and an apparent lack of willingness when it comes to greenlighting ESM reform) may be filtering in to BTP trade, via channels related to intra-EU tension.

  • This also comes with wider peripheral widening vs. Bunds after an impressive ’23 for most related compression trades, so could represent more of a profit taking type exercise.
  • BTP futures now show +30 or so on the day around 120.96, ~50 ticks shy of fresh cycle highs printed earlier today.
  • The session high (121.43) coincides with the 2.618 projection of the Nov 10-17-24 price swing.
  • The 10-Year BTP/Bund spread now sits ~5bp off session tights, just below 160bp, with 10-Year BTP yields back above 3.50%.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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