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EGBs-GILTS: Mixed Start On Busy Supply Day

BOND SUMMARY

EGB and Gilt futures are broadly flat early Tuesday, though BTPs have continued to underperform since Monday's 10-Yr syndication announcement. With little key data on the docket, supply is the focus.

  • Syndication for new Dec-31 BTP is underway (we're looking for lower end of E10-14bln in size).
  • In auctions, the Netherlands sells up to E2.5bln of DSL, Austria E1.4bln of RAGB, Germany E4bln of Bund, and the UK GBP4.25bln of Gilt.
  • German ind production disappointed in April (as with factory orders data yesterday - but at least in that case Mar saw upward and not downward revisions).
  • We also get Italy retail sales (0900BST), and German ZEW / final Eurozone Q1 GDP (1000BST).

Latest levels:

  • Sep Bund futures (RX) up 1 ticks at 171.76 (L: 171.7 / H: 171.93)
  • Sep Gilt futures (G) up 1 ticks at 127.17 (L: 127.13 / H: 127.25)
  • Sep BTP futures (IK) down 2 ticks at 150.22 (L: 150.21 / H: 150.38)
  • Italy / German 10-Yr spread 0.7bps wider at 111.9bps

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