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EGB/Gilt: Awaiting The ECB

BOND SUMMARY

Following a strong start, European government bonds have weakened through the morning alongside uneven trading in equities and broad G10 FX losses against the USD.

  • The gilt curve has steepened slightly with the 2s30s spread 1bp wider as a result of the short end firming and long end yields inching higher.
  • Bunds have traded weaker through the morning and are now unch on the day. Last yields: 2-year -0.6836%, 5-year -0.6084%, 10-year -0.3011%, 30-year 0.1993%.
  • OATs have similarly sold off and trade within 1bp of yesterday's close.
  • Supply this morning came from the UK (Linker, GBP800mn), Germany (Bobl, EUR3.2595bn allotted), Italy (BOTs, EUR6bn), Portugal (OTs, EUR1.25bn), Greece (Bills, EUR812.5mn)
  • French industrial production for January came in better than expected (-0.2% Y/Y vs -2.8% survey).

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