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EGBs-GILTS: Gilts Underperforming Early


Gilts are underperforming early amid bear steepening, with (again) some optimism on a Brexit deal being reached soon, and general global risk-on centred on COVID vaccine hopes.

  • Flash Nov PMIs the early focus, the question being how much of a slowdown would we see. Services in line for Germany but decent miss for France; German manufacturing showed a beat with France missing. EZ and UK figures out shortly (0900GMT and 0930GMT, respectively).
  • ECB's Schnabel speaks at 1310GMT while BOE Tsy Committee sees speakers including Bailey, Haldane at 1530GMT.
  • In supply, Belgium sells OLOs today for up to E1.5bn.

Latest levels:

  • Dec Bund futures (RX) down 8 ticks at 175.45 (L: 175.43 / H: 175.71)
  • Dec Gilt futures (G) down 26 ticks at 134.94 (L: 134.93 / H: 135.27)
  • Dec BTP futures (IK) up 3 ticks at 151.02 (L: 150.96 / H: 151.12)
  • Italy / German 10-Yr spread 0.6bps tighter at 121bps

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