Bunds Outperform EGB Counterparts, Short End Of Greek Curve Richens

Core/semi-core EGBs continue to lag 10-Year German paper during today’s richening (albeit with outrights now comfortably shy of best levels), with bull flattening moves also observed across most of those curves.

• The moves in spreads are relatively modest, with 0.5-1.0bp of widening seen across the major 10-Year spreads.
• Peripherals have also widened vs. 10-Year Bunds, with Portuguese paper widening the least (0.5bp) and Italian paper widening the most (2.5bp).
• Note that the Greek curve has seen some bull steepening, with the front end of that curve likely aided by source reports suggesting that Greece will start selling stakes in its four largest banks in the autumn.