Bull flattening favoured

EGBs have stayed better bid, led by Treasuries, after US 10yr yields broke lower, to make an attempt to May lows.

• Unwinding steepeners have been initiated, keeping Global curves bull flatter for the session.
• Peripheral have widened, with Greece the standout, trading 7bps wider against the German 10yr, pushing the spread at its widest point since the 21st of May.
• Looking ahead, US $58bn 3yr auction
• Sep Bund futures (RX) up 37 ticks at 172.12 (L: 171.7 / H: 172.3)
• Germany: The 2-Yr yield is down 0.4bps at -0.668%, 5-Yr is down 1.5bps at -0.597%, 10-Yr is down 2.4bps at -0.222%, and 30-Yr is down 3.2bps at 0.325%
• Sep BTP futures (IK) up 18 ticks at 150.42 (L: 150.11 / H: 150.53)
• Sep OAT futures (OA) up 27 ticks at 158.63 (L: 158.31 / H: 158.81)
• Italian BTP spread up 0.7bps at 111.9bps
• Spanish bond spread up 0.1bps at 67.2bps
• Portuguese PGB spread up 0.3bps at 67bps
• Greek bond spread up 6.9bps at 110bps