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EGBs-GILTS: Modest Bear Steepening Early

BOND SUMMARY

Bunds and Gilts are seeing bear steepening early Thursday reversing some of Wednesday's gains, while periphery spreads are broadly tighter. French + Spanish issuance the focus for the remainder of the morning.

  • Spain and Italy seeing upside surprises to May Services PMI readings; the rest are finals.
  • Solid issuance ahead Thursday, with Spain selling up to E6.25bln in nominal +linkers, and France selling up to E11bln in L-T OAT (incl Green OAT).
  • BOE's Bailey the only scheduled speaker (1700BST).

Latest levels:

  • Jun Bund futures (RX) down 16 ticks at 169.99 (L: 169.96 / H: 170.20)
  • Sep Gilt futures (G) down 12 ticks at 127.06 (L: 127.05 / H: 127.13)
  • Jun BTP futures (IK) up 2 ticks at 147.79 (L: 147.71 / H: 147.98)
  • Italy / German 10-Yr spread 0.7bps tighter at 106.9bps

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