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Trading Near Intraday Highs Ahead Of US CPI

EGBS

Core/semi-core EGBs operate close to intraday highs, with Bunds +14 ticks and OATs +12 ticks at typing. While OAT futures trade near last Thursday’s highs, Bunds remain short of those levels.

  • Little in the way of notable macro catalysts to note this morning, ahead of US CPI at 1330BST/1430CET.
  • Despite yesterday’s gains, a bearish technical threat in Bund futures remains present. A break of 133.48, Mar 27 high, is needed to reinstate a bullish theme.
  • The impending 15-year Bund supply may be helping to cap rallies in Bund in the run-up to the bidding deadline.
  • German cash yields are 1 to 2bps lower today, while 10-year periphery spreads to Bunds are once again tighter with the exception of Portugal (where E1.5bln of OT supply is due this morning).

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