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EGBs-GILTS: Bouncing Off Lows

BOND SUMMARY

Bunds and Gilts are bouncing off early lows in the wake of an apparent Democratic victory in both US Georgia Senate races (Beftair pricing at 98% probability). Equities coming down from highs, USD dollar bouncing a bit as well.

  • In data: French Dec CPI on the weak side. Mixed on the PMI front, with Spain beating, Italy missing (the latter more pronounced and potentially assisting the core FI bid). German state inflation numbers incoming, nat'l number out later.
  • In supply, E5bn of new German 10-Yr Bund and GBP3bn of 0.25% Jul-31 Gilt feature.
  • BOE's Bailey speaks at TSC of the FSR (1400GMT).

Latest levels:

  • Mar Bund futures (RX) down 44 ticks at 177.46 (L: 177.02 / H: 177.85)
  • Mar Gilt futures (G) down 30 ticks at 135.03 (L: 134.68 / H: 135.07)
  • Mar BTP futures (IK) down 15 ticks at 151.77 (L: 151.28 / H: 151.78)
  • Italy / German 10-Yr spread 3.8bps tighter at 110.5bps

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