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Busy morning session


A busy start of the year for EGBs, and elevated volumes.

  • Bund spiked throughout the morning session, with buying seen across core and semi core.
  • Bunds extended gains post Spanish PMI, to push through the 178.00 figure, to print a 178.37 high.
  • Irish 10yr yield is tested new record low at -0.344%, while Spain and Portugal yields look edge back into negative territory
  • Given the faster bid move in Bund, peripherals trade wider versus the German 10yr, with Italy the widest by 3.3bps at 114.1bps.
  • Gilts took their cue from the better bid in Europe, and despite the vaccine roll-out set to start today, lock down concerns remains.
  • US Treasuries remains within overnight ranges, and trade a touch in the red at the time of typing, on the Risk on flow.
  • Looking ahead, US Mfg PMI is the notable data, but final reading, so unlikely to move the needle.
  • On the speaker front, Fed Evans, Bostic and Mester are scheduled, while for Europe, ECB Lane is the highlight.
  • Mar Bund futures (RX) up 61 ticks at 178.25 (L: 177.52 / H: 178.37)
  • Mar Gilt futures (G) up 25 ticks at 135.79 (L: 135.32 / H: 135.96)
  • Mar BTP futures (IK) up 21 ticks at 152.22 (L: 151.62 / H: 152.29)
  • Italy / German 10-Yr spread 2.9bps wider at 114.1bps
  • Mar OAT futures (OA) up 51 ticks at 168.37 (L: 167.76 / H: 168.46)
  • US 2-Yr yield is unchanged at 0.1211%, 5-Yr is up 0.5bps at 0.3655%, 10-Yr is up 1.5bps at 0.9282%, and 30-Yr is up 1.7bps at 1.6616%.* Mar 10-Yr futures (TY) down 3/32 at 137-31.5 (L: 137-26.5/ H: 138-02)

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