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Move Off Intraday Highs, Peripherals Tighten

EGBS

EGBs have drifted away from intraday highs, taking cues from Gilts in the wake of speculation surrounding today's UK budget.

  • Bunds are -41 ticks at 132.88, but the first support remains some way off at 132.08 (March 4 low).
  • The German and French cash curves have lightly bear steepened on the day.
  • 10-year periphery spreads to Bunds have tightened, with European equities performing strongly. The 10-year BTP/Bund spread is -2.5bps at 136.5bps, just shy of yesterday's low.
  • Today's Eurozone data releases were not market movers: January retail sales growth remained negative Y/Y, albeit less so than consensus expectations, while February construction PMIs from Germany and the wider Eurozone remained comfortably below 50 in spite of an improvement vs Jan.
  • Today's regional calendar is light, but cross-market focus will be on the aforementioned UK budget (1230GMT/1330CET), US JOLTS/ADP data and the BoC decision.

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