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EGBs-GILTS: Stronger Ahead Of ECB

BOND SUMMARY

European bonds appear to have little fear of an adverse outcome from today's ECB decision (1245GMT) and Lagarde presser (1330GMT), with core FI stronger/bull flattening, and periphery spreads tighter.

  • Modest risk-on (European stocks largely higher) thus far; EUR and GBP stronger.
  • Minimal data ahead of the ECB decision - last call for our preview.
  • Ireland sells up to E1.5bn of 10/30Yr IGBs, while Italy sells 3/7Yr BTP for up to E8bn.

Latest levels:

  • Jun Bund futures (RX) up 37 ticks at 171.69 (L: 171.3 / H: 171.69)
  • Jun Gilt futures (G) up 28 ticks at 129.09 (L: 128.91 / H: 129.11)
  • Jun BTP futures (IK) up 49 ticks at 149.42 (L: 148.95 / H: 149.43)
  • Italy / German 10-Yr spread 1.3bps tighter at 97.5bps

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