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EGBs-GILTS: Periphery Spreads Retrace Some Of Wednesday's Widening

BONDS

Bunds and Gilts are a little stronger in early European trade Thursday, with periphery spreads retracing some of Wednesday's widening.

  • After bouncing sharply off the key 100bp spread mark to 10Y Bunds, BTPs are outperforming, with the spread coming down from 104bp wides Weds, to 102.20bp this morning.
  • A very quiet schedule ahead: after UK GDP (2Q reading was in line, June beat but lower revision to May), there's no prominent European data outside of Eurozone industrial production at 1000BST.
  • Instead we wait again for US data, including jobless claims and producer prices.
  • No European central bank speakers and no bond supply either.

Latest levels:

  • Sep Bund futures (RX) up 8 ticks at 176.65 (L: 176.56 / H: 176.77)
  • Sep Gilt futures (G) up 6 ticks at 129.69 (L: 129.68 / H: 129.82)
  • Sep BTP futures (IK) up 15 ticks at 155.04 (L: 154.82 / H: 155.09)
  • Italy / German 10-Yr spread 0.9bps tighter at 102.2bps

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