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/EGBs-GILTS: The core EGB/Gilt rally...>

BOND SUMMARY
BOND SUMMARY: /EGBs-GILTS: The core EGB/Gilt rally continues on, helped out by a
Chinese yuan fix close to the key 7.00 level vs USD, weak German data, and
global central banks (most notably RBNZ) easing more aggressively than expected.
- Gilt and Bund curves bull flattening slightly.
- German Jun industrial production way weaker than expected at -1.5% M/M (MNI
Median: -0.4%); 5.2% Y/Y figure worst since 2009. Thin on data otherwise.
- Slight underperformance by Italy again, 10-Yr BTP spreads flat/Germany, while
Spain and Portugal 1.5-2.0bps tighter. Greece 1.7bps wider of Bunds.
- For Italy, possible eye on Fitch ratings review Friday (BBB, neg outlook).
- Germany comes to EGB markets today, selling E4bln of Bobl.
- Short Sterling strip up 1-3 ticks; Euribor up 0.5-1.5 ticks.
- Latest futures prices:
* Sep Bund futures (RX) up 28 ticks at 176.86 (L: 176.72 / H: 176.97)
* Sep BTP futures (IK) up 25 ticks at 140.44 (L: 140.28 / H: 140.81)
* Sep OAT futures (OA) up 31 ticks at 168.65 (L: 168.53 / H: 168.76)
* Sep Gilt futures (G) up 27 ticks at 134.26 (L: 134.21 / H: 134.35)

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