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EGB/Gilt - Have fully reversed this week's rallies

BONDS
  • EGBs and Bund continue to trade on the back foot this afternoon, and futures have fully reversed this week's rallies.
  • US ISM and Durable Goods beat expectations, while Final services PMI was revised a touch lower, but still remains in contraction territory.
  • All the peripheral spreads are tighter today, with Italy in the lead by 7.8bps tighter against the German 10yr.
  • Once again Gilt trades in line with Bund, the Gilt/Bund spread is flat.
  • All the attention turns to the BoE tomorrow for the UK.
  • Looking ahead, Fed Harker, Daly, Barkin and Kashkari are still scheduled to speak.
  • Gilt futures are down -1.28 today at 117.23 with 10y yields up 10.5bp at 1.971% and 2y yields up 12.5bp at 1.866%.
  • Bund futures are down -1.72 today at 156.38 with 10y Bund yields up 9.6bp at 0.912% and Schatz yields up 11.1bp at 0.417%.
  • BTP futures are down -0.22 today at 127.25 with 10y yields up 0.8bp at 3.066% and 2y yields up 2.5bp at 1.350%.
  • OAT futures are down -1.21 today at 145.19 with 10y yields up 7.5bp at 1.479% and 2y yields up 4.4bp at 0.318%.

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