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Off Highs

EGBS

EGBs are off session highs after modest upward revisions in the French, German and Eurozone final manufacturing PMI readings help reverse some the rally that came on the back of a notably softer-than-expected Italian survey reading.

  • Still, the combination of the Fed feedthrough, post-holiday catch up (including yesterday’s weakness in oil) and Italian PMI prints leave yields lower on the day.
  • German yields are 2.5-3.5bp lower, with 5s outperforming.
  • EGB spreads to Bunds are little changed to a touch tighter across much of the curve, with BTPs outperforming post-Fed (aided by tighter credit spreads).
  • OATs are a touch tighter vs. Bunds across the curve, with wider market movements countering any worry surrounding the duration intensive French supply due shortly.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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