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EGBs-GILTS: Core FI Edges Lower

BOND SUMMARY

Core FI is weaker in early Europe trade, with periphery spreads a little wider, alongside equities/futures rallying over the last couple of hours. Supply in focus.

  • Germany sells E1bln of Aug-50 Bund today; EU syndication of SURE dual-tranche 5Y/30Y, and BTP Italia retail selling enters its 2nd day (1st day saw E2.5B in orders, today E161mn so far).
  • In data, France Sep IP beat expectations M/M though Aug revised lower; UK employment report basically in line. Italy Sep IP at 0900GMT and German Nov ZEW at 1000GMT eyed up next.
  • ECB's Knot speaks at 1400GMT.

Latest levels:

  • Dec Bund futures (RX) down 3 ticks at 174.33 (L: 174.24 / H: 174.63)
  • Dec Gilt futures (G) up 7 ticks at 134.34 (L: 134.21 / H: 134.48)
  • Dec BTP futures (IK) down 8 ticks at 149.38 (L: 149.24 / H: 149.66)
  • Italy / German 10-Yr spread 0.5bps wider at 127.1bps

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