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Marginal Firming Ahead of JH

BOND SUMMARY

Sovereign bonds have broadly firmed this morning alongside uneven trading in equity and FX markets.

  • The UST curve has slightly bull flattened with the 2s30s spread 1bp narrower. TYU1 trades at 133-19, near the middle of the day's range (L: 133-16 / H: 133-20+).
  • The gilt curve has steepened a touch on the back of the short end firming and longer end trading slightly weaker.
  • Bunds started off on a strong footing before giving back the early gains to now trade just above yesterday's close.
  • BTPs have traded higher, with the longer end outperforming and the curve 1bp flatter.
  • The European data calendar was light this morning. The focus today will be on US PCE data for July and the latest University of Michigan Consumer Confidence reading for August.
  • Following yesterday's bombing in Kabul, US President Joe Biden has pledged to continue with the planned evacuation of US troops from Afghanistan.

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