Italy/Germany spread through March 2016 low

Bear steepening in EGBs resumed this afternoon, following a more Hawkish/less Dovish BoE.

• Longer end Bund trades heavy and the underperformance against semi core has translated in BTP/Bund spread testing the March 2016 low level, another 4bps tighter today.
• Better bid in equities after the higher revised US factory order is keeping the lid on core Bonds.
• Bund tested 176.10 low at the time of typing, just short of support at 176.09 1.00 proj of Jan 4 - 12 sell-off from Jan 27 high
• Looking ahead, Fed Kaplan, Daly and RBA lowe are the scheduled speakers later.
• Mar Bund futures (RX) down 29 ticks at 176.18 (L: 176.1 / H: 176.57)
• Germany: The 2-Yr yield is up 0.4bps at -0.707%, 5-Yr is up 1.1bps at -0.683%, 10-Yr is up 1.6bps at -0.448%, and 30-Yr is up 1.9bps at 0.014%.
• Mar BTP futures (IK) up 31 ticks at 152.08 (L: 151.43 / H: 152.14)
• Mar OAT futures (OA) down 12 ticks at 166.41 (L: 166.3 / H: 166.67)
• Italy / German 10-Yr spread 4.1bps tighter at 101bps
• Spanish bond spread down 0.7bps at 58.4bps
• Portuguese PGB spread down 0.4bps at 51.6bps
• Greek bond spread down 1bps at 109.6bps