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EGBs-GILTS CASH CLOSE: BTPs Outperform As Conte Seen Safe

BONDS

BTPs outperformed Tuesday, while Bunds and Gilts rallied late in the afternoon, following US Tsys. Supply today saw strong demand.

  • BBG citing sources that PM Conte may receive an outright majority in the Senate confidence vote later today (with some abstentions helping the arithmetic) pushed 10-Yr BTP spreads vs Bunds to lowest close since Jan 13. Vote expected well after hours.
  • Otherwise the story of the day was supply: Finland (E1bn), UK (GBP6.5bn 2046 syndication), France (E7bn 50-Yr). Additionally, local press reported Greece raised E2bn in 30-Yr private placement.
  • UK inflation data the early focus Wednesday; ECB coming Thursday.
Closing Cash Levels/10-Yr Bond Spreads vs Bunds:
  • Germany: The 2-Yr yield is up 0.8bps at -0.707%, 5-Yr is up 0.1bps at -0.716%, 10-Yr is up 0.1bps at -0.526%, and 30-Yr is up 0.1bps at -0.114%.
  • UK: The 2-Yr yield is up 1bps at -0.127%, 5-Yr is up 0.8bps at -0.041%, 10-Yr is up 0.2bps at 0.289%, and 30-Yr is down 0.3bps at 0.859%.
  • Italian BTP spread down 4.4bps at 111.4bps / Spanish down 1bps at 59.5bps

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