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JGBs keep the lid on Govies

  • A mixed start for Bund, with the contract trading in a tight range pre cash open.
  • EGBs are nonetheless all in the red, after Nikkei reported that Amamiya refused the post of Governor and that Japan will nominate Kazuo Ueda as the next Governor at the BoJ.
  • This put some pressure into JGBs, and in turn kept the lid on EGBs and Treasuries.
  • Peripheral spread are all wider, Italy leads by 2.5bps, although is closer to flat against the German 10yr.
  • Gilt future underperforms Bund, and the Gilt/Bund spread stands 2.8bps wider at the time of typing.
  • UK GDP surprised to the downside for December but still came in line for the Q/Q print at flat (recall the BOE projected +0.1%Q/Q).
  • US Treasuries are closer to flat, albeit a few ticks in the red at the time of typing, with investors waiting on the US prelim Michigan release.
  • Looking ahead, US prelim Michigan is the only notable data for the day.
  • Speakers, include BoE Pill, ECB Schnabel, de Cos, while Fed Waller and Harker are at a Crypto conference.

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