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EGBs-GILTS: Early Gains Fade With EGB Supply, BoE Eyed

BOND SUMMARY

Early gains in core European FI have largely faded, with periphery spreads a little tighter. Main focus of the session is the BoE decision out at 1200BST, with press conference at 1300BST.

  • German factory orders exceeded expectations in March. No key European data for rest of the session though (UK Svcs / Comp PMI at 0930BST is Apr final).
  • In supply, Spain sells up to E6.25bln in nominal/linkers, with France selling up to E11bln of M-T/L-T OAT.
  • ECB economic bulletin at 0900BST, with ECB speakers including de Guindos (1130BST), Lagarde (1215BST), and Schnabel (1415BST) all speaking.

Latest levels:

  • Jun Bund futures (RX) steady at at 170.47 (L: 170.47 / H: 170.7)
  • Jun Gilt futures (G) up 5 ticks at 128 (L: 127.98 / H: 128.14)
  • Jun BTP futures (IK) up 4 ticks at 147.37 (L: 147.33 / H: 147.53)
  • Italy / German 10-Yr spread 0.5bps tighter at 112.1bps

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