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UK political uncertainty helped push....>

EGB SUMMARY: UK political uncertainty helped push Bunds higher by the end of the
day after thin trading in a narrow range, with peripheries paring gains.
- Sep8 Bund futures had sold off as much as 47 ticks and curves steepened
earlier on a combination of weaker USTs, supply (EFSF dual tranche
announcement), and ECB's Draghi expressing confidence in inflation convergence.
- But UK Foreign Sec Boris Johnson's resignation put focus back on Brexit risks,
with the safe-haven bid pushing Bund futures back up to 162.55, off 26 ticks on
the day. 2s10s Bunds 0.7bps steeper at 95.3bps, down from 96.5bps high.
- Periphery spreads roughly tracked these moves. The 10-year BTP spread to Bunds
fell to a low of 236.1bps, but now 237.4bps, 4.9bps narrower on the day.
- Longer-dated Euribor futures looked offered earlier amid thin volumes but have
recovered nearly all losses, with Green and Blue contracts off 0.5-1.0 ticks.
- Supply looking like a mounting theme weighing on EGBs this week, with heavy
sale/zero redemptions schedule (Netherlands/Germany kick off auctions Tuesday)
complemented by speculation regarding long-dated issuance amid an ECB 'operation
twist' (Reuters reporting Belgium mulling 40/50-year sales).

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