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EGB/GILTS SUMMARY

BOND SUMMARY
  • EGBs have traded within ranges and mostly better offered weighted by heavy supplies from Spain and France this morning.
  • Bunds has traded lower on delta hedging, but also helped by the stronger Services PMIs throughout Europe.
  • Rolling positions into September is again leading in terms of volumes with investors taking a breather before the US NFP release tomorrow, for clue on the US Labour market recovery.
  • Attention though, will be quickly turning towards ECB next week.
  • Gilts are underperforming against EGBs, down 23 ticks at the time of typing, pushing the UK/German 10yr spread wider on the session by 1.9bp.
  • Curves across the board trades bear steeper, but contract stays within ranges.
  • Looking ahead, US ADP, IJC, Service PMI will be final, so more focus on the ISM service index.
  • Speakers include BoE Bailey, Fed Bostic, Kaplan, Harker, Quarles

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