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German Curve Bull Flattens Ahead Of Schatz Supply

EGBS

Core/semi-core EGBs are a touch firmer but remain comfortably below yesterday's highs.

  • There were limited spill overs from this morning's UK labour market data.
  • Bunds are +15 ticks at 133.54, towards the top of today's tight 23 tick range. The first support remains at 134.18 (High Feb 7).
  • Schatz futures are pressured ahead of this morning's E4.5bln supply, with contracts -1.5 ticks at 105.85.
  • The German cash curve has bull flattened as a result, with the French curve showing similar dynamics.
  • Periphery spreads to Bunds are tighter even as European equities move away from intraday highs. The 10-year BTP/Bund spread is -1.8bps at 130.8bps at typing.
  • German February final HICP confirmed flash estimates, with improvements noted in MNI's inflation breadth indicator. Spanish, French and Spanish final HICP figures are due later this week.
  • Main focus remains on US CPI at 1230GMT/1330CET.

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