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EGBs-GILTS: Weighed Down By Equity Recovery


Bunds and Gilts are trading fairly flat early Wednesday, with little decisive direction so far and well within Tuesday's ranges.

  • We're now well off Tuesday's intraday highs (which represent multimonth highs too) as equities and US Tsy yields bounce back. Periphery spreads fairly steady.
  • The last bond auction of the week sees Germany sell E1.5bln of Aug-48 Bund.
  • Pretty light data schedule once again, with just UK public sector finances out earlier (Jun net borrowing bigger than analyst consensus, but large downward revisions and the deficit in the 1st three months of the fiscal year was less than officials forecast).
  • No planned central bank speakers for the rest of the session.
Latest levels:
  • Sep Bund futures (RX) down 3 ticks at 175.82 (L: 175.76 / H: 176.11)
  • Sep Gilt futures (G) down 16 ticks at 129.74 (L: 129.74 / H: 130.01)
  • Sep BTP futures (IK) down 3 ticks at 153.3 (L: 153.29 / H: 153.47)
  • Italy / German 10-Yr spread 0.3bps wider at 109.9bps

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