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EGBs-GILTS: More Bear Steepening Amid Heavier Volumes

BOND SUMMARY
Core FI is under renewed pressure while periphery spreads have dropped to new multi-month lows early Wednesday. These are more or less the same themes as yesterday, in which we saw strong bear steepening in the UK and German curves as equities moved higher. In contrast to the early August doldrums, decent futures volumes today, too.
  • Supply today includes GBP2.75B in Gilt sales, Germany sells EUR4B in Bunds.
  • In data, UK Jun/Q2 GDP numbers beat expectations. 1000ET sees Eurozone Jun industrial production.

** Latest levels:

  • Sep Bund futures (RX) down 41 ticks at 176.25 (L: 176.25 / H: 176.88)
  • Sep Gilt futures (G) down 24 ticks at 137 (L: 136.97 / H: 137.12)
  • Sep BTP futures (IK) down 14 ticks at 147.42 (L: 147.33 / H: 147.7)
  • Italy / German 10-Yr spread 1.3bps tighter at 140.8bps

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