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EGBS: Futures Slightly Stronger, But Ranges Tight Amid Light Regional News flow

EGBS

Core/semi-core EGBs are a little stronger this morning, though Bund and OAT futures remain comfortably within yesterday’s range. Market focus remains on Wednesday’s FOMC minutes and Thursday’s flash PMIs/Q2 negotiated wages data, leaving broader market sentiment at the fore for EGBs. 

  • Bank of Finland Governor Rehn’s endorsement of a September rate cut yesterday evening prompted little reaction in EGBs/STIRs at the open, given ECB-dated OIS already fully price a 25bp cut at that gathering.
  • Regional news flow has otherwise been light, with the continued pullback in oil futures providing modest support to core FI.
  • Eurozone final July CPI confirmed flash estimates, while German PPI was also in line with consensus earlier today. 
  • German and French cash yields are little changed across the curve, as are 10-year peripheral spreads to Bunds. 
  • Canadian CPI may provide some spillover potential this afternoon. 

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