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EGBs-GILTS: Off Session Lows, 'No Deal' Risks Eyed

BOND SUMMARY

Bunds and Gilts are a little weaker but off session lows with bear steepening in both curves, with European equities a little higher, and periphery EGB spreads a little tighter.

Most overnight intrigue surrounds Brexit and potential 'no deal' (or at least, major speculation thereof for the coming weeks). Main impact has been GBP underperformance.

A pretty thin data calendar to start ECB week (German Jul ind. prod. came in weaker than expected), and U.S. is off for holidays.

Today's issuance is all bills (France, Netherlands, Germany). BOE's Haskel speaks at 1515BST. ** Latest levels:

  • Dec Bund futures (RX) down 36 ticks at 173.57 (L: 173.33 / H: 173.68)
  • Dec Gilt futures (G) down 22 ticks at 135.52 (L: 135.31 / H: 135.53)
  • Dec BTP futures (IK) down 6 ticks at 144.98 (L: 144.69 / H: 145.1)
  • Dec OAT futures (OA) down 33 ticks at 167.17 (L: 166.93 / H: 167.24)
  • Italy / German 10-Yr spread 0.9bps tighter at 147.9bps

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