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EGB/Gilt: Gaining Ground

BOND SUMMARY

European sovereign bonds are bid this morning with the EGB periphery marginally outperforming. Equities trade mixed while the US dollar has broadly lost ground against G10 FX.

  • The gilt curve has bull flattened with the 2s30s spread is 1bp narrower.
  • Bunds have similarly firmed with cash yields 1-2bp lower across the curve.
  • OATs trade in line with Bunds. The market easily absorbed this morning's OAT supply.
  • BTPs have outperformed with yields 2-3bp lower on the day.
  • Supply this morning came from France (OATs, EUR10.4bn) and Spain (Oblis, Bonos, Obli-EI, EUR4.419bn).
  • The European data slate was light this morning. Focus turns to US claims data, factory order and durable goods orders later today.

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