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EGB/GILT

BOND SUMMARY

Yesterday's bull flattening theme has followed through to this morning with core and periphery EGBs trading firmer.

  • Gilt yields are around 1bp lower. The Dec-30 gilt future trades at 136.72, near the top of the day's range (L: 136.47 / H 136.76).
  • Bunds are similarly marginally firmer and the curve slightly flatter. Last yields: 2-year -0.7807%, 5-year -0.8048%, 10-year -0.6291%, 30-year -0.2201%.
  • BTPs trade in line with bunds with cash yields 2bp lower on the day.
  • Focus today is on the EU summit and the risk of discussions breaking down. There is speculation in the media that UK Prime Minister Boris Johnson is willing to talk up the prospect of a no-deal Brexit in a bid to break the impasse.
  • Supply this morning came from the UK (T-Bills, GBP1.75bn) and Belgium (OLOs via ORI, EUR505mn).
  • The final Eurozone CPI print for September was in line with the initial estimate (-0.3% Y/Y).

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