A Touch Cheaper Overnight

Bund futures leant on a downtick in e-minis/Euro STOXX 50 futures ahead of the old futures open, which allowed them to edge away from overnight lows, leaving the contract -20 or so at typing. The contract failed to threaten the boundaries of Friday’s range overnight. Spill over from light pressure for U.S. Tsys helped Bunds lower in Asia hours.

• Regional headline flow has been relatively limited over the weekend, with ECB’s Villeroy pushing the higher for longer narrative, while ECB’s Centeno stuck to his typically dovish leaning.
• The threat of relatively imminent Chinese CPI deflation was noted overnight, with the headline reading for June sitting at 0.0% Y/Y.
• That release led to worry re: domestic demand trimming a chunk of the early gains in mainland Chinese equities (with the early firming linked to the perceived end to the regulatory crackdown on big tech), although focus on stimulus remains evident and the data did nothing to dent expectations on that front.
• Comments from ECB’s Nagel & Herodotou headline the regional docket today, with nothing in the way of tier 1 data releases/bond supply scheduled at present.