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Inflation and large Italian supply are at the forefront

BUNDS
  • Bund and Equities are under early pressure following the pre cash open German NRW higher Inflation data.
  • Still, Bund is short of the initial support at 131.70, while Estoxx futures (VGU3) did print its highest level in 2 weeks overnight, albeit off its best level following the data.
  • Resistance in Bund is at today's high 132.56, followed 132.87.
  • Today, focus is squarely on the German Regional/National CPI, Spain prelim CPI. And on the other side of the Pond, US 2nd readings GDP/Core PCE, wholesales Inventories.
  • SUPPLY: LARGE Italian supply, Italy 2028, 2033, 2034 (equates combined 76.8k BTP) will weigh, plus 2031 floating (won't impact BTP). German 2027 (Equates 11k Bobl) shouldn't impact the contract.

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