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EGB/Gilt - A sea of red for Govies

BONDS
  • Another busier session for EGBs, not so much in terms of range, but another above average session volume wise.
  • Bund closed the upside gap this morning and on the margin were better bid.
  • But more selling interest into the strength took hold, and the contract is trading at the intraday low 171.55 (at the time of typing).
  • Initial target is still at the 171.34/171.30 area.
  • Peripheral are wider, and Italy underperforms the most, translating in a 1.5bp wider BTP/Bund spread.
  • Gilt have traded inline with Bund, and the 10yr spread is flat
  • The decent UK CPI beat set the tone and Gilts are down 25 ticks at the time of typing.
  • Looking ahead, ECB's Lane speaks at webinar
  • Dec Bund futures (RX) down 36 ticks at 171.55 (L: 171.54 / H: 172.07)
  • Germany: The 2-Yr yield is up 0.6bps at -0.694%, 5-Yr is up 1.5bps at -0.629%, 10-Yr is up 2.4bps at -0.316%, and 30-Yr is up 2.9bps at 0.181%
  • Dec Gilt futures (G) down 25 ticks at 127.79 (L: 127.78 / H: 128.14)
  • UK: The 2-Yr yield is up 2.9bps at 0.26%, 5-Yr is up 2.2bps at 0.441%, 10-Yr is up 2.6bps at 0.764%, and 30-Yr is up 2.6bps at 1.069%.
  • Dec BTP futures (IK) down 42 ticks at 154.09 (L: 154.05 / H: 154.55)
  • Dec OAT futures (OA) down 45 ticks at 167.97 (L: 167.96 / H: 168.54)
  • Italian BTP spread up 1.6bps at 100.3bpsSpanish bond spread up 0.7bps at 65.3bps
  • Portuguese PGB spread up 1.5bps at 55.8bps
  • Greek bond spread up 0.3bps at 111.8bps

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