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The move in US Tsys is hammering core...>

EGB SUMMARY
EGB SUMMARY: The move in US Tsys is hammering core EGBs and rate futures, while
Italian spreads are narrower on announced deficit reduction targets.
- The Dec 18 Bund future is down 74 ticks at 158.19, though off its lows, having
traded in a range of 157.74-158.23 today. Price action mirroring US 10Y Tsys,
which hit highest yield levels since 2011 (just above 3.23%) on comments last
night by Fed Chair Powell that the FOMC `may go past neutral`, before subsiding.
- BTPs faded gains, Dec 18 BTP future down 19 ticks at 121.88 (high of 122.74
today). Main news is that PM Conte has announced deficit targets of 2.4% of GDP
in 2019, 2.1% in 2020, and 1.8% in 2021, vs a potentially unacceptable 2.4% each
yr.
- The Dec 18 BTP future is down 19 ticks at 121.88, having traded in a range of
121.8-122.74 today.
- Spreads lower across periphery EGBs with that move in Bunds, spread of 10-Yr
Italian BTPs vs Bunds down 3.1bps at 280.7bps, Spain down 3.2bps at 102.9bps,
Portugal down 2.8bps at 139.1bps, Greece down 3.331bps at 389.8bps.
- Supply today includes Spain and France M/T - L/T issuance.

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