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EGB/GILTS

BOND SUMMARY

European govies have rallied this morning alongside soft trading in equities.

  • The giilt curve has bull flattened with the 2s30s spread 2bp narrower. The Dec-20 gilt future trades at 136.68, 17 ticks off the day's low.
  • Former UK Prime Minister David Cameron has joined Sir John Major and Tony Blair in warning against Downing Street's proposed internal markets bill, which would break international law and deal a heavy blow to Brexit negotiations.
  • Bunds have traded firmer with cash yields broadly 1-2bp lower across the curve.
  • OATs have similarly rallied and marginally outperformed bunds. Last yields: 2-year -0.6521%, 5-year -0.5803%, 10-year -0.2154%, 30-year 0.4815%
  • BTPs have outperformed with cash yields 1-4bp lower on the day.
  • Supply this morning came from Germany (Bubills, EUR7.49bn) and the Netherlands (DSLs, EUR2.57bn)
  • Focus this week will be on the US Fed and Bank of England meetings, which follow a relatively uneventful ECB monetary policy meeting last week.

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