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Bund Bear Steepening ... Again

EGB SUMMARY

The German curve reversed early flattening as equities rebounded in the afternoon, continuing the theme of bear steepening vs early lows for the 4th consecutive session. Meanwhile Italian spreads look set to close tighter than they opened for the first time in 7 sessions.

Supply was the biggest 'event' of the day, with Finland selling EUR3bln in 10Yr via syndication, Italy selling E3bln of CTZ, Germany selling E3bln of Bund, and Portugal selling E1.25bln of OTs for a grand total of E10.25bln.

Not much new from ECB's Kazimir/Schnabel earlier today, with all eyes on Jackson Hole Thurs and Fri (Schnabel, Lane and Panetta scheduled to participate).

This week's limited data slate continues Thursday, with French Aug confidence indicators and Italy Jun industrial figures the only 'highlights'.** Latest levels:

  • Sep Bund futures (RX) down 33 ticks at 175.56 (L: 175.47 / H: 176.04)
  • Sep BTP futures (IK) up 16 ticks at 146.9 (L: 146.51 / H: 147.09)
  • Sep OAT futures (OA) down 16 ticks at 167.63 (L: 167.51 / H: 167.87)
  • Italy / German 10-Yr spread 3.4bps tighter at 142.3bps

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