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EGBs/GILTs: The escalation in..........>

BOND SUMMARY
BOND SUMMARY: EGBs/GILTs: The escalation in tensions between Washington and
Tehran after a US airstrike killed Iran's top military leader has been the
dominant driver behind the rally in European govvies this morning.
- The German bund curve has bull flattened with 2s30s trading down 6bp on the
back of a 7bp drop in the 30-year bund. 
- French OATs have similarly rallied, although are underperforming bunds.  
- The rally in Italian BTPs appeared to stall around 1015GMT, but yields have
started to grind lower again. The 10-year yield is down 8bp on the day and it
outperforming the curve. 
- UK Construction PMI data for December came in below expectations (44.4 vs 45.9
survey), with the slump now persisting for longer than during the financial
crisis. 
- Gilt yields are 2-7bp lower. Current yield levels: 2-year 0.540%, 5-year
0.542%, 10-year 0.728%, 30-year 1.208%. 

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