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German Bunds have recovered majority....>

EGB SUMMARY: German Bunds have recovered majority of their earlier morning blip
lower following weaker than expected German economic sentiment and UK average
weekly earnings. German 10-yr yield is 0.5bp higher at 0.529% vs intra-day high
of 0.538% while 2s/10s is 0.5bp steeper and 10s/30s 0.4bp flatter.
- German ZEW economic sentiment dropped to -8.2 in April compared to 5.1 in
March, coming in well below MNI analysts forecast of -3.0 as fears of
international trade disputes weighs.
- Earlier Core/Semi core EGBs were seen weighed by fall in UK Gilts as markets
positioned ahead of key UK labour data. But this started to reverse as wage
growth remained steady.
- Italy and Portugal are leading the rest of the periphery higher with 10-yr
spreads to Germany around 3bp tighter. There has been news of Italian bank
Intesa Sanpaolo receiving an offer for E10.8bln worth of bad loans on its books
from Intrum Justitia which appears to be supporting bid in BTPs.
- Swap flows have been a little light Tuesday, however there appeared to be a
payer of a 10-yr swap a earlier.

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