U.S. Tsy Weakness To The Fore For Gilts & EGBs After € Supply Dominated In The Morning

Weakness in Tsys leaks through into EGBs in recent trade, as U.S. Tsy dynamics take the lead from € IG & sovereign supply matters. Both Bund and Gilt futures showed through their respective early session lows on the move, before moving off fresh session worsts. Both curves continue to twist flatten, although the move in Gilts is a little more limited than that seen in Bunds (in both wings of the curve). Previously outlined EGB spread dynamics i.e. BTP widening and Greek tightening at the 10-Year point, remain evident. The remainder of the major EGB spreads still see some widening vs. Bunds at the 10-Year point.