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Govies are favoured as Asian Equities plummets

BOND SUMMARY

EGBs extended gains on FTQ (Flight to Quality) flows, after Asian Equities plummeted further during our morning European session.

  • The move in Asia spilled over into EU and US Equities.
  • Bund has once again tested the initial Yield support -0.442% which equated to 176.30 today.
  • We did print a 176.32 high today, and yield was also tested yesterday, down to -0.449% (176.49 in futures).
  • Peripherals are mostly wider, with Greece leading by 1bp.
  • Gilts are trading inline with EGBs, and the curve traded bull flatter.
  • UK 5/30s eye yesterday's low at 69.356, also the flattest level in a year (14/07/2020), now at 69.952.
  • US Treasuries saw similar price action, with investors moving into safe haven, after US Equities move into the red.
  • US 5/30s is flatter, but trade within yesterday's range.
  • Looking ahead, ECB de Cos is the notable speaker.
  • On the data front, sees US prelim Durable Goods.
  • Earning season continues, today includes, 3M, GE, Alphabet, Visa, Microsoft, Apple and Starbucks.
  • Finally, we get US 5yr notes later

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