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EGBs-GILTS: Moving Up After Early Weakness

BOND SUMMARY

Core FI is off early lows with Gilts underperforming slightly and periphery spreads marginally tighter. Supply in most focus this morning.

  • German factory orders data for May surprised heavily to the downside, albeit we saw a small upward revision to prior. German ZEW and Eurozone retail sales out at 1000BST.
  • France selling E5bln WNG of May-53 OAT via syndication. In auctions we have Austria selling E1.5bln of RAGB, UK GBP4.25bln of Gilt, and Germany E0.6bln of linkers.
  • ECB speakers up ahead include de Guindos (0910BST) and Visco (0930BST).

Latest levels:

  • Sep Bund futures (RX) up 3 ticks at 172.73 (L: 172.49 / H: 172.77)
  • Sep Gilt futures (G) down 2 ticks at 128.16 (L: 128.03 / H: 128.19)
  • Sep BTP futures (IK) up 10 ticks at 151.84 (L: 151.54 / H: 151.89)
  • Italy / German 10-Yr spread 0.9bps tighter at 100.6bps

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