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EGBS: 10-year Spreads To Bunds Tighter Again

EGBS

10-year EGB spreads to Bunds are tighter this morning, again led by BTPs and GGBs. The BTP/Bund spread has narrowed over 25bps from the September wides, currently 1.5bps tighter today at 121bps.

  • We note that this week’s spread tightening was not hampered much by Tuesday’s pullback in European equities (following weak ASML and LVMH earnings).
  • The ECB decision headlines today’s regional calendar at 1315BST/1415CET, but supply from Spain and France is also due this morning.
  • Spain will sell 7/10/25-year Oblis at 0930BST. Curve RV should facilitate good demand for the on-the-run 7-year 3.10% Jul-31 Obli, with 7s trading at multi-month cheaps on the 5/7/10-year fly.
  • MT OAT supply is also due from France at 0950BST, before linker supply at 1050BST. See our daily issuance document for more here.

Figure 1: 5/7/10-year Obli Fly

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10-year EGB spreads to Bunds are tighter this morning, again led by BTPs and GGBs. The BTP/Bund spread has narrowed over 25bps from the September wides, currently 1.5bps tighter today at 121bps.

  • We note that this week’s spread tightening was not hampered much by Tuesday’s pullback in European equities (following weak ASML and LVMH earnings).
  • The ECB decision headlines today’s regional calendar at 1315BST/1415CET, but supply from Spain and France is also due this morning.
  • Spain will sell 7/10/25-year Oblis at 0930BST. Curve RV should facilitate good demand for the on-the-run 7-year 3.10% Jul-31 Obli, with 7s trading at multi-month cheaps on the 5/7/10-year fly.
  • MT OAT supply is also due from France at 0950BST, before linker supply at 1050BST. See our daily issuance document for more here.

Figure 1: 5/7/10-year Obli Fly