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The Bund contract opened lower but......>

EGB SUMMARY
EGB SUMMARY: The Bund contract opened lower but spent the first hour of trading
clawing back those losses. Talk of EU sanctions on US steel, jeans and bourbon
reversed some of the risk-on trade seen late yesterday as hopes emerged that
perhaps Trump would not follow through with a trade war.
- Currently, 2Y German yield is down 0.8bp at -0.562% and the 10Y up 0.3bp at
0.646%. The rally took the Bund away from the bottom end of a well defined
channel bullish daily channel where support is at 159.36 today.
- Italian debt continues to shake off the election result and the Bund-BTP 10Y
is 2.2bp tighter and leads tightening in almost all EGB spreads to Germany.
- Little in the way of macro data on either side of the pond today. Supply is
modest with E1.1bln from two Austrian lines and a total of E1bln of two German
inflation linked bonds. There are no ECB speakers owing to the proximity of the
ECB meeting.
- Hearing of a strong buyer of short-dated OATs today. 
- 

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