German government bonds trading little changed Friday into the New York session and trading in tight ranges ahead of expiry of the March Bund options contract later this session. Volumes are also light ahead of the G-20 Summit in Mexico this weekend. EGB peripheral spreads are mixed, with Spanish and Italian bonds outperforming on news that Woori Investment & Securities Co in South Korea and Cathay Life Insurance Co. – Taiwan’s biggest life insurer are planning to invest in those bonds to take advantage of yields. Italian bonds also underpinned by strong CTZ/linker auctions, where the Tesoro sold E3.0bln 2-year zero coupon Jan 2014 CTZ issue versus target size of E2.0bln-E3.0bln at average yield of 3.013% versus 3.763% previous sale and covered 1.935 times versus 1.71 previous. Italy also sold E754mln of the 2.10% Sep 2016 BTPei; avg yield 2.71%, cover 1.86 and E747mln of 2.35% Sep 2019 BTPei; avg yield 3.19%, cover 1.85. Italy 10-year BTP spread is 10bps tighter at +498bps and Spain 10-year Bono spread is 5bps tighter at +312bps. Portugal 10-year OT spread is 10bps wider at +1215bps.
EasyForexNews Research Team