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EGB/Gilt: Unwinding Yesterday's Gains

BOND SUMMARY

European sovereign bonds have traded weaker this morning with curves bear steepening alongside modest gains for equities following yesterday's losses.

  • Gilts have sold off with yields the very long end up 3bp. The curve is 3bp steeper.
  • Bunds have similarly traded weaker with the longer end of the curve underperforming.
  • OAT yields are now broadly 1-2bp higher on the day.
  • German retail sales for May came in weaker than expected (-2.4% Y/Y vs -1.0% survey). The final eurozone manufacturing print for June came in at 63.4, a touch above the earlier estimate of 63.1.
  • Supply this morning came from the UK (Gilts, GBP3.5bn), France (OATs, EUR10.99bn) and Spain (Bonos/Oblis/ObliEis, EUR5.286bn).

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