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German FI little changed heading into..........>

EGBS
EGBS: German FI little changed heading into Europe; Schatz +1.5, Bobls +3.0,
Bunds +2.
- This comes after Bunds were well bid on Tuesday.
- BTP/Bund spread compression came to the fore by the close yesterday, with BTPs
driven by hopes of a workable PD/M5S coalition being formed by the end of play
today (the deadline set by President Mattarella), although local press reports
point to some lingering stumbling blocks.
- Comments from ECB's de Guindos also added to the demand for EGBs, although
whether or not he covered any fresh ground is questionable, as he pointed to low
rates for a long time and the need for data-dependence at the ECB, as opposed to
being driven by market expectations.
- Greek paper narrowed vs. Germany on the back of the announcement re: the
removal of the final round of capital controls.
- The Italian political situation will be at the fore in front of the
aforementioned deadline, with German 10-Year supply and 2022 paper from the EFSF
on the issuance docket.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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