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Core/Semi core EGBs have extended.......>

EGB SUMMARY
EGB SUMMARY: Core/Semi core EGBs have extended there recovering in European
afternoon trade despite the rally in EU and US equities and look set to close
modestly higher. German 10-yr yield is 1bp lower at 0.514%.
- Bunds opened on the soft side then edged lower taking cue from sell-off in UK
Gilts ahead of key UK labour data and German ZEW survey. But this started to
reverse as UK wage growth remained steady and then extended the recovery as ZEW
came in weaker than expected.
- German ZEW economic sentiment dropped to -8.2 in April compared to 5.1 in
March, coming in well below MNI analysts forecast of -3.0 as fears of
international trade disputes weighs.
- EMU periphery has kept pace with the recovery in the core EGB market with
Bund/BTP 10-yr spread 3.5bp tighter, likely supported by news of of Italian bank
Intesa Sanpaolo receiving an offer for E10.8bln worth of bad loans on its books
from Intrum Justitia and CCT redemption payment of E11.9bln
- Tomorrow sees a German 10-yr Bund re-opening auction for E3bln, Eurozone final
March HICP and comments from ECB Draghi/Coeure.

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