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BTPs are not liking the overnight news on......>

EGBS
EGBS: BTPs are not liking the overnight news on the Italian political situation
with former PM Berlusconi giving his blessing for his coalition partner, the
League, to attempt to form a government with the anti-establishment Five Star
Movement (M5S). 10-yr BTP yield has risen by 4.5bp to 1.927% with Bund/BTP
spread 5.3bp wider at 137.6bps.
- The sharp move in BTPs has weighed on Spain and Portugal as well with 10-yr
spreads to Germany 1.6bp and 3.2bp wider respectively.
- German 10-yr Bund yield is -0.7bp at 0.552%, curve touch flatter
- ECB Lane said last night that it was too soon to say whether the Euro zone is
being impacted by a slowdown in global demand or just a decrease in the amount
of slack in the European economy.
- There has been large selling in the Jun8 Euribor contract this morning (75k at
100.32) which has added to very large selling seen late last night (110k at
100.325). Sources unsure to the reason why, but one thinks it could be related
to Eonia.
- Little data from EU today, so attention will be on BoE and US CPI

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