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EGB markets have gyrated but are........>

EGB SUMMARY
EGB SUMMARY: EGB markets have gyrated but are largely flat on the day, amid
downside supply pressure from Italy and reports of US threats to leave NATO.
- The Italian yield curve steepened sharply around the time of BTP
medium/long-term auction results after 1000BST but has since flattened, with the
2s10s spread down 0.2bps at 189.4bps; 10-year BTP yields now down 0.7bps, with
the spread to Bunds in 1.0bps at 231.2bps.
- Solid auctions for both Italy and Ireland Thursday morning; high cover ratios
noted in particular in short-end BTPs.
- Bunds are flat (zero change in the Sep8 future), though the curve has
steepened slightly as the short-end and belly have rallied by a couple of basis
points. 2s10s spread up 0.34bps at 99.4bps, 2s30s up 0.97bps to 164.6bps.
- Euribor futures are slightly higher in Green and Blue contracts (up 0.5
ticks), but little change overall on the strip.
- Attention to be paid to the release at 1130GMT of the ECB's accounts of the
June Governing Council meeting, for any clarification over the timing of the
first 2019 hike.

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