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EGBs-GILTS: Risk-On Start Ahead Of DSL / Gilt Supply


Another risk on start, with Bunds and Gilts weaker / curves bear steepening slightly, and periphery spreads compressing.

  • As with yesterday, the big moves are in the USD (weaker by 0.3% vs GBP and EUR), with equities also gaining (Estoxx futs up 0.6%) though neither translating into like-for-like moves in FI.
  • Netherlands sells up to E2.5bn of Jan-27 DSL while UK sells total GBP4bn of Jul-27 and Jul-57 Gilt.
  • ECB's Lagarde speaks at 1400GMT, Lane at 1745GMT and de Cos at 1810GMT.
  • Data's mainly about confidence indicators: French Nov manuf confidence came in line, business conf a little weak. German IFO at 0900GMT.

Latest levels:

  • Dec Bund futures (RX) down 14 ticks at 175.27 (L: 175.2 / H: 175.37)
  • Dec Gilt futures (G) down 8 ticks at 134.87 (L: 134.77 / H: 134.92)
  • Dec BTP futures (IK) up 5 ticks at 151.23 (L: 151.1 / H: 151.26)
  • Italy / German 10-Yr spread 2.2bps tighter at 118.3bps

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