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EGB/Gilt - Take their cue from Treasuries

BONDS
  • A steadier afternoon session for EGBs and Bund.
  • Upside pullback in Europe were limited following an overall stronger US data, despite the NFP headline miss.
  • US Labour markets remains very tight.
  • US Tnotes dipped lower to test support at 128.08, printed a low.
  • Support in Bund at 170.02 noted today, despite trading at 169.95 yesterday has held printed 170.05 low.
  • Peripherals are mostly flat, but some big moves in Greece, with the spread 12bps wider versus Germany.
  • There was talks of supply but this is seen as overblown, as you would expect some syndication in January anyway.
  • A more subdued affair for Gilts, as the contracts stays in a 30 ticks range (12306/123.36)
  • Gilt/Bund spread is 1.2bp tighter today.
  • Looking ahead, US Fed Bostic and BoE Mann are still scheduled to speak

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