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EGB/Gilt - Govies futures remain underpinned

BONDS
  • EGBs and Bund have continued to rally this afternoon, a continuation from the US Inflation data last week, as some investors look for a less aggressive rate hike path.
  • US PPI miss has also provided some upside momentum, but futures are off their high levels.
  • Notable move in peripheral has been further tightening in the BTP/Bund spread, trading at its lowest level since the start of July.
  • Next support in the spread is at 192.76bps, the 8th July low.
  • Gilt futures underperforms Europe, and as such the Gilt/Bund spread is leaning wider today, by 2bps, but trading close to the 120.00bps mark, at 122.6 at the time of typing.
  • Looking ahead, ECB Holzmann and Elderson are still scheduled for today, but attention turns to the UK CPI tomorrow morning.
  • Other notable data for tomorrow, include Italy (final) CPI, US Retail sales/IP, Canada CPI.

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