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The EGB market has slipped lower this...>

EGB SUMMARY
EGB SUMMARY: The EGB market has slipped lower this morning. The initial catalyst
was an obscure Swiss sight deposit decline (the first in 2017) that created a
domino effect through FX and latterly rates markets. Then, the RXU7 Bund
contract dipped below the 100 day moving average at 163.13 and helped provide an
additional boost lower.
- German industrial production data weakened 1.1% in June and well below
consensus but still up 1.8% Q/Q in the second quarter.
- Italian and Spanish debt are well bid this morning as the market looks forward
to a 3 week hiatus in peripheral market supply. This week is also very light in
terms of supply but comes only from the AAA/AA space of Germany and Austria. The
Bun-BTP spread is 2.9bp tighter today at 152.5bp, virtually at the lowest since
last December.
- Currently, the German 2-10Y curve is moving up 1.5-1.8bp across the yield
curve. The 10-Year is at 0.484%.

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