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Around Flat At End Of Asia Trade

BUNDS

Bund futures +5.

  • The contract saw a small gap lower overnight, likely linked to firmer Chinese equities, before a bid in U.S. Tsys and a move off best levels for Chinese equities lent fresh support.
  • Friday’s Jackson Hole messaging, while not groundbreaking, reaffirmed the higher for longer narrative, allowing the German curve to flatten on the day.
  • As a reminder, ECB President Lagarde underscored the idea that interest rate levels will move as high as necessary to bring inflation back to target.
  • Elsewhere, Governing Council member Kazaks noted he would err on the side of tighter monetary policy vs. allowing the risk of the re-acceleration of inflation. Meanwhile, Governing Council hawk Holzmann suggested that rates will have to move “somewhat higher.”
  • Monday will see liquidity thinned by the observance of a UK public holiday.
  • Eurozone money supply headlines a thin regional data docket, while comments from ECB hawks Nagel & Holzmann are eyed.
  • Lastly, the EU will come to market with a 3/18-year EU-bond auction: Up to E1.5bln of the on-the-run 3-year 2.75% Oct-26 EU-bond (ISIN: EU000A3K4D82) and up to E1.5bln of the 0.45% Jul-41 EU-bond (ISIN: EU000A3KT6B1).
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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