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Fading off the highs

BONDS
  • Continued unwind in German Govies and EGBs, seems that the small higher revision in France, Germany and EU final PMIs, as well as the above 1yr CPI expectation coming above consensus has capped some of the upsides.
  • Shorter end Schatz is seeing some Paying interest, German 2yr supply has also limited some of the rallies.
  • Latest Swap related payer trades in Schatz were: DUH4 another 2.77k at 106.18 and 1.4k at 106.195 (earlier).
  • For March Bund, initial downside area of interest would be at 133.87 (gap).
  • Gap in RXZ3 is at 133.45, Dec volume has overtaken the March here.

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