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EGB/Gilt: A Weak Start

BOND SUMMARY

European sovereign bonds have traded weaker this morning with marginal underperformance at the longer end.

  • Gilt yields are 1-2bp higher on the day.
  • Bunds have similarly traded softer with cash yields within 1bp of the Friday close.
  • BTP yields are 1-3bp higher with the curve 1bp steeper.
  • The final EZ and UK PMI prints were better than the initial estimates and point to continued robust expansion in economic activity.
  • Supply this morning came from Germany (Bubills, EUR5.251bn), the Netherlands (DTC, EUR2.11bn) and the EFSF (syndicated bond tap). Later today France will sell a combination of BTFs for EUR4.7-6.3bn).
  • UK PM Boris Johnson is expected to announce later today an end of the current Covid social restrictions on July 19.

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