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EGBs-GILTS: Slightly Weaker On Equity Bounce

BOND SUMMARY

Bunds and Gilts are a little weaker to start Wednesday, with some bear steepening in both curves as equities enjoy a modest bid after a poor start to the week. Periphery spreads a bit tighter.

  • In supply, UK sells GBP2.5bn of Jul-35 Gilt, and Germany sells E4bln of Feb-31 Bund.
  • Earlier, UK CPI came in slightly on the light side vs expectations - no further key Europe data today.
  • Speakers include BOE's Ramsden (0905BST) and Bailey (1130BST).
  • The German Federal Constitutional Court rejected an injunction that sought to stop the ratification of the EU's long-term budget and COVID-19 recovery package in the German parliament. Limited reaction in Bunds.

Latest levels:

  • Jun Bund futures (RX) down 3 ticks at 170.71 (L: 170.66 / H: 170.9)
  • Jun Gilt futures (G) down 12 ticks at 128.64 (L: 128.63 / H: 128.88)
  • Jun BTP futures (IK) up 22 ticks at 148.14 (L: 147.95 / H: 148.19)
  • Italy / German 10-Yr spread 2.2bps tighter at 101.9bps

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