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"It's just generally a risk-on environment and people are short covering. It's very small volumes. The main thing is Bunds have been a bit beaten up ahead of the Bobl auction."
Italian 10-year government bond yields were last down 12 basis points on the day at 5.96 percent while 5-year yields fell 17 bps to 5.37 percent. Spanish yields were 5 bps lower at 6.73 percent.