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EGBs-GILTS: Gilts Underperforming On PMI Friday

BOND SUMMARY

Gilts are stronger but underperforming Bunds early, with the latter off highs amid a beat in German manufacturing PMI (following a slight miss in French Services). Periphery spreads fairly flat.

  • Earlier, UK Sep retail sales easily beat expectations. Eurozone and UK PMIs up later.
  • Generally positive data seems to be offset by than concern about high COVID case numbers in Europe.
  • ECB's Villeroy (1345BST) and BOE's Ramsden (1500BST) speak today. No sovereign bond issuance on the schedule.

Latest levels:

  • Dec Bund futures (RX) up 22 ticks at 175.41 (L: 175.18 / H: 175.52)
  • Dec Gilt futures (G) up 1 ticks at 135.38 (L: 135.29 / H: 135.46)
  • Dec BTP futures (IK) up 13 ticks at 148.58 (L: 148.49 / H: 148.71)
  • Italy / German 10-Yr spread 0.3bps wider at 137.2bps

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