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Bunds Outperforming Gilts

BOND SUMMARY
  • Bunds have shrugged off some early weakness on the back of confirmation of US-China dialogue and have moved above yesterday's / August 12's highs to move as high as 177.00 today.
  • Peripheral spreads have moved wider today led by Cyprus, Greece, Lithuania and Spain.
  • Gilts in contrast have seen a much more limited move higher today, failing to even retrace 50% from yesterday's highs to lows.
  • There has been little in the way of headlines to drive these moves.
  • The ECB Accounts due up imminently will be watched closely as will tomorrow's flash PMIs for August and UK retail sales data.
  • - Gilt futures are up 0.10 today at 137.01 with Bund futures up 0.38 at 176.95, BTP futures up 0.12 at 148.18 and OAT futures up 0.34 at 168.89.

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