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Sharp Move Lower Ahead Of Cash Close

EGBS

Some sharp weakness for EGBs going into the European cash close: no particular catalyst seen (ECB's Knot leaned hawkish but that's nothing new and terminal rate pricing didn't really move on it).

  • Bunds underperforming Treasuries so it's not a US-led move either, though we note this is the second consecutive session where we had decent weakness in Bunds alongside USD strength.
  • Bund futures move 38 ticks lower through the Apr 24 low (133.28), Apr 19 low next (133.10).
  • Not just a Bund move either as we've seen BTP spreads widen by about 2bp to session highs.

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