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AUSSIE 10-YEAR TECHS

(U1) Needle Points North

US TSYS

Twist Steepening On Monday

AUSSIE 3-YEAR TECHS

(U1) Holding Onto Gains

EGBs-GILTS: BTPs Fly On Draghi News

BOND SUMMARY

Italian BTPs are the star of the European FI show Weds morning, with yields and spreads collapsing as ex-ECB Draghi meets Pres Mattarella to form a technocratic gov't. Core FI a little weaker.

  • In supply, PGB 30-Yr syndication for E3bn well-received (books >E40bn); UK sold GBP2.75bn of Jul-31 Gilt.
  • Mixed PMIs this morning (Spain -ve, Italy +ve) and high inflation readings (EZ core +1.4% Y/Y vs 0.9% exp) provided some food for thought on the data front but apart from knee-jerk moves haven't really had a lasting impact.
  • Now awaiting US Data/speakers, and further Draghi news. Our BOE meeting (Thurs) preview has just gone out (click here for link).

Latest levels:

  • Mar Bund futures (RX) down 16 ticks at 176.59 (L: 176.38 / H: 176.7)
  • Mar Gilt futures (G) down 12 ticks at 133.63 (L: 133.46 / H: 133.69)
  • Mar BTP futures (IK) up 114 ticks at 152.11 (L: 151.58 / H: 152.29)
  • Italy / German 10-Yr spread 10.7bps tighter at 103.3bps
MNI London Bureau | +44 203-865-3807 | tim.cooper@marketnews.com