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EGBs-GILTS: Long End Strengthens

BOND SUMMARY

The long end rally has very tentatively resumed Monday after a pause late last week, with the Bund and Gilt curves bull flattening. Periphery spreads a little tighter in the early going.

  • Very little on the schedule today, with no key data and no bond issuance; ECB's de Guindos speaks at 1000BST.
  • Overnight, ECB's Lagarde signaled that the upcoming meeting will have "some interesting variations and changes", and said she expects the current bond-buying plan to run "at least" until March 2022 but could then be followed by a "transition into a new format."
  • Some focus on UK PM Johnson press conference at 1700BST, at which he's due to confirm most legal restrictions related to Covid-19 will end on 19 July.

Latest levels:

  • Sep Bund futures (RX) up 27 ticks at 174.17 (L: 173.91 / H: 174.19)
  • Sep Gilt futures (G) up 27 ticks at 129.04 (L: 128.76 / H: 129.11)
  • Sep BTP futures (IK) up 39 ticks at 152.61 (L: 152.25 / H: 152.63)
  • Italy / German 10-Yr spread 1.4bps tighter at 104.2bps

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