A Little Softer, No Lasting Relief From ECB Sources Ahead Of Key Jackson Hole Speeches

A relatively tight start for German FI, with a brief relief rally surrounding the RTRS ECB sources report pointing to “momentum growing for ECB rate hike pause as growth falters” quickly pared.

• The piece generally reflected the data-dependent stance that has already been heavily touted by the Bank itself, coupled with the recent run of data. It noted that the September debate “remains open and nothing would be settled until after the next inflation reading and the ECB's own new economic projections.”
• Further out the piece stressed that “all the sources agreed that even in case of a pause, the ECB would need to make clear its job was not done and that more policy tightening could still be needed.”
• Bund futures -15, while the major German cash benchmarks run 3-4bp cheaper across the curve.
• Core & semi-core EGB spreads are little changed vs. Bunds.
• Peripherals sit a touch tighter vs. Bunds at the 10-Year point (excluding Spain), likely aided by the RTRS ECB sources report (at the margin), equity futures firming from session lows and CDS indices tightening a touch.
• Focus is squarely on impending comments from Lagarde, Powell & co. out of Jackson Hole.