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Sell Off Extends Further, BTPs Give Back Most Of Yesterday’s Tightening Vs. Bunds

EGBS

Fresh cheapening momentum in U.S. Tsys, outlined elsewhere, helps the pullback from best levels in Bunds extend.

  • Futures move comfortably through yesterday’s low, now -45 or so at 127.32. Bears look to 127.01, the Sep 28 low and the bear trigger, as the next level of meaningful technical support.
  • German cash benchmarks are flat to 6bp cheaper, steepening.
  • 2s10s sit at the lest inverted level since May, while 5s30s hit fresh YtD steeps.
  • BTPs continue to lead the widening vs. Bunds, with the BTP/Bund spread a little over 5bp wider on the day, giving back the bulk of yesterday’s BTP Valore demand-driven narrowing. Outright pressure in core global FI and continued worry re: the Italian fiscal situation are eyed as the likely drivers there.
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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