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EGBs-GILTS: UK Long End Continues To Weaken

BOND SUMMARY
Bunds have bounced back from early lows as equities have retreated from highs, while Gilts remain firmly lower, with curves bear steepening (esp in UK where long-end continues to sell off w 30 Yr yields eclipsing 1% for the first time since March). Periphery EGB spreads mixed.
  • Gilts testing support at 133.79, next support per our tech analyst is 135.55.
  • With US Tsy cash markets closed for the Veterans Day Holiday, attention is on the ECB's Sintra conference - Day 1 lineup includes Lagarde (intro remarks) at 1300GMT and Lane (chairing a panel) at 1600GMT.
  • Dearth of data. UK sells GBP0.8bn of 2036 Gilt linkers, Germany sells E1.0bn of 2050 Bund.

Latest levels:

  • Dec Bund futures (RX) down 9 ticks at 173.93 (L: 173.66 / H: 174.08)
  • Dec Gilt futures (G) down 28 ticks at 133.77 (L: 133.68 / H: 133.93)
  • Dec BTP futures (IK) down 15 ticks at 149.27 (L: 149.14 / H: 149.3)
  • Italy / German 10-Yr spread 0.3bps wider at 125bps

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