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EGBs-GILTS: Momentum Lost

BOND SUMMARY

Bunds and Gilts have largely retraced gains following US Pres Trump's apparent ending of stimulus negotiations, after which he appeared to open the door to signing some provisions.

  • Plenty of attention on EU-UK negotiations too, w Barnier's team arriving in London.
  • After yesterday's Factory Orders beat, German Industrial Production missed to the downside today, albeit w higher revision (SA).
  • We hear from ECB's Lagarde (1310BST) and Villeroy (1730BST) - and from DNB's Elderson (1000BST) following news he will join the ECB Exec Board.
  • Germany sells E3bn of Aug-30 Bund; UK sells GBP3.25bln in Oct-30 Gilt and Aug-41 linker.

Latest levels:

  • Dec Bund futures (RX) up 16 ticks at 174.43 (L: 174.39 / H: 174.61)
  • Dec Gilt futures (G) up 9 ticks at 135.41 (L: 135.38 / H: 135.6)
  • Dec BTP futures (IK) up 21 ticks at 148.8 (L: 148.58 / H: 148.87)
  • Italy / German 10-Yr spread 0.2bps wider at 128.5bps

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