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EGB/GILT

BOND SUMMARY

European govies have broadly traded weaker, mirroring USTs ahead of today's

FOMC decision.

- The Sep-20 gilt future has traded down to 138.27, towards the bottom end of

the morning range (L: 138.21, H: 138.56).

- Bund yields are ~1bp higher on the day with the curve flat overall.

- OATs have marginally underperformed with slight bear steepening of the curve.

The 2s30s spread is ~1bp wider.

- BTPs trade mixed and close to unch on the day.

- Supply this morning came from the UK (Gilts, GBP2.75bn), Germany (Bunds,

EUR2.92bn), Italy (BOTs, EUR7bn), Greece (Bills, EUR812.5mn) and the EFSF

(bond, EUR1bn).

- The European data slate was not market moving, with the most interesting print

being Spanish retail sales for June (-3.3% Y/Y from -20.2% in May).

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