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EGBs-GILTS CASH CLOSE: BTPs Retrace, ECB Eyed Thursday

BONDS

BTPs were the focal point again Wednesday, with spreads widening in a "buy the rumour, sell the fact"-type move following PM Conte's successful survival of confidence votes Monday and Tuesday.

  • Bunds saw little movement, while Gilts underperformed amid bear steepening. Before the open, UK Dec inflation data surprised to the upside.
  • Though no change is expected, ECB decision/presser is the focal point Thursday; contact us if you haven't seen the MNI Preview. We also get supply from Spain, France, and the UK.
Closing levels/10-Yr Periphery EGB spreads/Bunds:
  • Germany: The 2-Yr yield is down 0.3bps at -0.71%, 5-Yr is down 0.6bps at -0.722%, 10-Yr is down 0.3bps at -0.529%, and 30-Yr is down 0.4bps at -0.118%.
  • UK: The 2-Yr yield is up 1bps at -0.117%, 5-Yr is up 0.8bps at -0.033%, 10-Yr is up 1.2bps at 0.301%, and 30-Yr is up 2.2bps at 0.881%.
  • Italian BTP spread up 3.4bps at 114.8bps / Spanish spread up 0.9bps at 60.4bps

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