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EGB/Gilt: Yesterday's risk-on pivot....>

BOND SUMMARY
BOND SUMMARY: EGB/Gilt: Yesterday's risk-on pivot has spilled over into this
morning's session. EGBs have traded weaker alongside additional incremental
gains for equities.
- Gilts are soft and trading only marginally below yesterday's levels. The
Sep-20 gilt future trades at 136.99, 20 ticks off the day's high.
- Bunds have similarly traded lower, with this morning's supply adding
additional weight to the longer end weakness.
- BTPs have sold off with the belly marginally underperforming. Cash yields are
1-3bp higher and partially reversing some of yesterday's gains.
- Supply this morning came from the UK (Gilts, GBP2.25bn), Germany (Bunds,
EUR4.14bn) and Portugal (Bills, EUR1.25bn). In addition, Italy is arranging an
issuance tap for specialists for up to EUR 1.75bn across the Jul-23 CCTeu, 2.80%
Dec-28 BTP and 1.65% Mar-32 BTP.
- Both UK and Eurozone CPI data for May printed in line with expectations.
Italian industrial data showed a colossal 49.0% Y/Y contraction in orders for
April.

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