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Bond futures fall. UK PM resigns

  • EGBs and Bund have continued to drift lower this morning, some likely position squaring as Govies unwind yesterday's gains.
  • Also news coming out of China that Ministry of Finance is considering allowing local governments to sell 1.5 trillion yuan ($220 billion) of special bonds in the second half, an unprecedented acceleration of infrastructure funding aimed at shoring up the country’s beleaguered economy (as per Bloomberg).
  • This has kept Global Bonds heavy and in the red.
  • Peripherals are mixed, with Greece initially trading tighter against the German 10yr, but is now 8.3bps wider at 215.2.
  • Gilt lags EGBs, but is nonetheless also trading in the red, helped by the news that Boris Johnson is resigning.
  • Gilt/Bund spread trades 1bp tighter.
  • Tnotes have also drifted lower, a continuation from the US ISM beat yesterday.
  • ALL EYES will now be on the US NFP tomorrow.
  • Looking ahead, there's no market moving data for today, main focus will be on the ECB minutes (Account).
  • Speakers, include ECB Lane, and Stournaras, Centeno, Herodotou speak in Athens. BoE Mann and Pill. Fed Waller and Bullard.
  • Sep Bund futures (RX) down 131 ticks at 150.62 (L: 150.15 / H: 151.65)
  • Germany: The 2-Yr yield is up 11.4bps at 0.502%, 5-Yr is up 10bps at 0.921%, 10-Yr is up 8.6bps at 1.292%, and 30-Yr is up 7.3bps at 1.596%.
  • Sep Gilt futures (G) down 96 ticks at 114.99 (L: 114.66 / H: 115.6)
  • UK: The 2-Yr yield is up 9.8bps at 1.851%, 5-Yr is up 8.8bps at 1.834%, 10-Yr is up 7.4bps at 2.166%, and 30-Yr is up 5.1bps at 2.589%.
  • Sep BTP futures (IK) down 138 ticks at 123.79 (L: 123.41 / H: 124.95)
  • Sep OAT futures (OA) down 120 ticks at 139.87 (L: 139.38 / H: 140.87)
  • Italian BTP spread up 3.2bps at 198bps
  • US: The 2-Yr yield is up 2.1bps at 3.0223%, 5-Yr is up 2.5bps at 3.0049%, 10-Yr is up 3.3bps at 2.9612%, and 30-Yr is up 3.2bps at 3.1499%.
  • The Sep 22 T-Note future is down 13.5/32 at 118-2, having traded in a range of 118-16 to 119-5.

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