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EGBs-GILTS: Bunds Outperforming

BOND SUMMARY

Bunds are outperforming as equities retrace from early highs, with uncertainty lingering over UK-EU negotiations, mixed Services PMIs, and the health of US Pres Trump.

  • Despite lack of breakthrough over the weekend on UK-EU talks, negotiations continue this week (this morning, EU's von der Leyen announced she was self-isolating due to COVID exposure).
  • Main attention this morning in Data is Services PMI; Spain disappointed badly; Italy beat expectations. The latter helped lift risk appetite. Finals for other countries, not really in focus.
  • BOE's Haldane appears at 0930BST; ECB's Weidmann speaks at 1300BST, while Lagarde/Panetta participate in the Eurogroup meeting. No EGB/Gilt supply today.

Latest levels:

  • Dec Bund futures (RX) up 14 ticks at 174.8 (L: 174.55 / H: 174.9)
  • Dec Gilt futures (G) steady at at 135.73 (L: 135.72 / H: 135.93)
  • Dec BTP futures (IK) up 1 ticks at 148.63 (L: 148.58 / H: 148.84)
  • Italy / German 10-Yr spread 0.7bps wider at 132.7bps

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