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USTs Firm, EGBs Weaken Slightly

BOND SUMMARY

USTs have firmed while EGBs have traded a touch weaker alongside uneven trading in equities.

  • The UST curve has marginally bull flattened with the 2s30s spread 1bp narrower.
  • Bunds sold off in early trade before clawing back losses to now trade marginally below the Friday close. The curve is a modestly flatter.
  • It is a similar story for OATs, with the curve close to flat overall.
  • BTPs have so far failed to claw back the earlier losses with cash yields 1-2bp higher across much of the curve.
  • German regional CPI data show an acceleration in inflation for August, with the national estimate due out at 1300GMT.
  • The gilt market is closed on account of the UK national holiday observed today.
  • France will offer EUR4.8-6.0bn of BTFs later today

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