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Under pressure as Italian HICP embargo broken

BUNDS
  • Bunds are selling off as it the embargo appears to be broken for Italian HICP. Bloomberg are reporting HICP at 9.0%Y/Y (median consensus was 8.2%Y/Y). Bund futures have moved from around 148.40-148.50 ahead of the data to trade as low as 147.91 (note that our technical analyst sees support around the 147.94 level - a Fibo level that was briefly breached yesterday to 147.92.
  • ECB pricing for next week has increased from 64bp to closer to 67bp (yesterday's close of 66bp and we had been moving lower after the French HICP miss earlier today). 165bp priced by year-end (158bp low today, 163bp close yesterday). 238bp priced one-year out.

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