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EGBs-GILTS: Core FI Slips, Periphery Spreads Tighten


Monday has begun with an equity rally and weakness in core FI. PMI data is the morning's focus.

  • Bit of bear steepening in the German and UK curves.
  • Periphery spreads tightening with a risk-on theme overall (EuroStoxx600 and FTSE250 hitting all-time highs). Notable jump in BTP futures at the open (up 28 ticks) completely dissipated (last up 4 ticks).
  • Spanish Jul manufacturing PMI a little weaker than expected, while Dutch PMI slipped a little from June as well; Italy up at 0845BST then finals for France/Germany/EZ/UK.
  • No central bank speakers and only supply is bills.

Latest levels:

  • Sep Bund futures (RX) down 16 ticks at 176.41 (L: 176.37 / H: 176.63)
  • Sep Gilt futures (G) down 10 ticks at 129.69 (L: 129.64 / H: 129.8)
  • Sep BTP futures (IK) up 7 ticks at 154.35 (L: 154.2 / H: 154.56)
  • Italy / German 10-Yr spread 1.7bps tighter at 106.5bps

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