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USDCAD TECHS

Needle Still Points South

US TSYS

Yields Bounce as Equities Make New Monthly Highs

AUDUSD TECHS

Heading North

EURJPY TECHS

Bull Rally Accelerates

COLOMBIA

Economists Survey Raises 2021 CPI Forecast To 4.9%

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European government bonds have sold off this morning and curves have bear steepened alongside broad gains for equities and the USD.

  • Gilts have drifted lower, continuing from yesterday afternoon's sell-off and unwinding gains from the beginning of the week. Cash yields are now 1-2bp higher on the day.
  • Bund yields have similarly pushed up 1-2bp across much of the curve.
  • BTPs have underperformed core EGBs with yields 2-5bp higher and the belly of the curve leading the charge.
  • It is a similar story for OATs, which trade in line with bunds.
  • Supply this morning came from the UK (Linker, GBP700mn), Germany (Bund, EUR3.316bn allotted) and Italy (BOTs, EUR7bn).
  • The final German CPI print for July matched the initial estimate (3.1% Y/Y). Focus later today shifts to US CPI at 1330GMT.