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EGB/GILT

BOND SUMMARY

Core European government bonds have started the week on a firm footing, albeit with price action contained. The Eurozone periphery has traded weaker while equities have pushed higher.

- The Sep-20 gilt future has traded up to 138.52, towards the top end of the morning range and 2 ticks off the high.

- Bunds trade close to unch on the day. Current yield levels: 2-year -0.7154%, 5-year -0.7200%, 10-year -0.5280%, 30-year -0.1054%.

- OATs are similarly little changed with the curve trading flat overall.

- BTP cash yields are 1-2bp higher with the curve slightly steeper. The 2s10s spread is 2bp wider.

- Supply this morning came from Germany (Bubills, EUR3.56bn) and the Netherlands (DTCs, EUR2.61bn). This afternoon France will sell a combination of 3-/6-/12-month BTFs for E5.8-7.0bn).

- Final July PMI data for the eurozone big four came in slightly above expectations and is firmly in expansionary territory.

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