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EGBs-GILTS: Awaiting Rome's Next Moves

BOND SUMMARY

Bunds and Gilts are stronger with the curves fairly flat, though BTPs are the focal point, with political risk widening spreads, and Italian supply ahead this morning.

  • Cash BTPs have caught up to Wed's post-close weakness in futures, which themselves have since rebounded after ex-PM Renzi's announcement about his ministers leaving gov't. We await next steps by PM Conte.
  • Italy sells 3-/7-/30-Yr BTP this morning. ECB accounts at 1230GMT, ECB's de Cos speaks at 1600GMT. Sparse data slate.

Latest levels:

  • Mar Bund futures (RX) up 17 ticks at 177.53 (L: 177.32 / H: 177.58)
  • Mar Gilt futures (G) up 3 ticks at 134.24 (L: 134.07 / H: 134.26)
  • Mar BTP futures (IK) down 34 ticks at 151.31 (L: 151.09 / H: 151.53)
  • Italy / German 10-Yr spread 2.5bps wider at 114.7bps

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