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Peripheral Spreads Blow Wider as ECB Support Seen Waning

EGB SUMMARY
  • Markets took further their view that the ECB failed to push back against rate hike expectations by pushing peripheral European spreads wider still Friday, with solid volumes seen throughout the session. IT/GE and SP/GE 10y yield spreads closed wider by 9 and 6bps apiece, with a similar impact seen across the front-end of the curve.
  • Bund futures extended the Thursday weakness to touch a fresh low of 167.71, marking a pullback off the midweek highs of over 2 points. The German curve traded flatter still, taking the lead from similar moves stateside.
  • Focus in the coming week turns to the Fed rate decision on Wednesday as well as the decisions from the RBA, Bank of England and Norwegian central bank.
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

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