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Heavy supply is the early focus

BUNDS
  • A steady start for Bund, after the German final CPI came inline with expectations, and contract trades circa flat post cash open, early focus will be on supply.
  • Bund printed a 134.66 low yesterday, the lowest print since mid March following more Hawkish comment from ECB Holzmann yesterday, calling for another 50bps hike in May, although nothing surprising there from one of the most hawkish member, but also a non voter at the next 2 meetings.
  • Investor are also keeping a close eye on the Tnotes/Bund spread and the 100.00bps mark.
  • SUPPLY: Early focus will be on Supply, with Spain 3s, 10s, 20s, Italy 2026 (equates to 41k Short 2yr BTP) should weigh, 2030 2037, 2044 (equates combined to 46.6k BTP) should weigh, UK 2023 (Equates to 25.6k Gilt) should weigh, and US sells $18bn 30yr reopening.
  • In terms of data, Italy/EU IPs, Portugal final CPI, US PPI are the notable releases.
  • SPEAKERS: ECB Nagel (x2), BoE Pill.

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