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EGBS: Bunds Retrace All Of PMI Rally; OAT/Bund Holds Yesterday’s Widening

EGBS

Bund futures have retraced all of this morning’s PMI-induced rally, now -3 ticks at 132.27. Volumes have been above average through the morning, with markets seemingly judging that the PMIs have added little extra information to the Eurozone growth/inflation outlook (and by extension expected ECB policy).

The 10-year OAT/Bund spread is little changed today at ~69bps but has held much of yesterday’s ~3bp rise.  Conversely, BTPs underperform German paper across the curve, with the 10-year BTP/Bund currently ~2bps wider at 133bps (though off post-data wides of ~135bps).
 

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