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EGB/Gilt - Gilt outperform

BONDS
  • A calmer afternoon session in terms of volatility for EGBs and Bund, but nonetheless another wide trading session with EGB and Bund remaining under pressure, offered.
  • The short end part of that German strip, Schatz and Bobl, is where most of the interesting action is happening, which has been the trend of late.
  • Peripherals are mixed, Greece is 14.8bps tighter, while Portugal and Spain are circa 2.5bps wider,.
  • Gilts is being watched, after the Gilt/Bund spread has tightened another 2.4bps, to trade at flattest level since last July.
  • The spread broke through initial support at 99.91, now at 97.9.
  • looking ahead, Fed George speaks to the Economic Club of New York Gilt is down 24 ticks at 120.69
  • Bund futures are down -0.73 today at 156.64 with 10y Bund yields up 6.3bp at 0.693% and Schatz yields up 10.2bp at 0.040%.
  • BTP futures are down -0.55 today at 136.68 with 10y yields up 6.4bp at 2.177% and 2y yields up 9.9bp at 0.367%.
  • OAT futures are down -0.67 today at 149.63 with 10y yields up 6.7bp at 1.116% and 2y yields up 9.6bp at 0.057%.

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