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BONDS: Bund and Gilt Futures Scale Away From Highs

BONDS
BulletMarketsFixed Income Bullets

Bund and Gilt futures have pulled away from intraday highs, pressured by a renewed uptick in crude oil futures and the continued recovery in European/UK equities from lows.

  • Bund futures are -33 ticks at 132.83. Highs of 133.14 were reached when Bank of Portugal Governor Centeno suggested a 50bp ECB cut was possible at upcoming meetings.
  • However, the bid lacked follow-through, with the comments aligning with Centeno’s traditionally dovish leanings.
  • ECB President Lagarde largely stuck to the October press conference script, and did not speculate on what it would take to cut by 50bps.
  • The BTP/Bund spread is a little wider today at 123.5bps. Today’s 7/30-year syndication has priced, seeing strong demand across both lines.
  • Gilt futures are -37 at 96.85. BoE Governor Bailey did not comment on monetary policy in his speech, while Greene’s rhetoric was in line with previous comments.
  • The 10-year Gilt/Bund spread is little changed today at 185bps.
  • Tomorrow’s EU and UK data calendar is light, leaving focus on Central Bank speakers once again.
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Bund and Gilt futures have pulled away from intraday highs, pressured by a renewed uptick in crude oil futures and the continued recovery in European/UK equities from lows.

  • Bund futures are -33 ticks at 132.83. Highs of 133.14 were reached when Bank of Portugal Governor Centeno suggested a 50bp ECB cut was possible at upcoming meetings.
  • However, the bid lacked follow-through, with the comments aligning with Centeno’s traditionally dovish leanings.
  • ECB President Lagarde largely stuck to the October press conference script, and did not speculate on what it would take to cut by 50bps.
  • The BTP/Bund spread is a little wider today at 123.5bps. Today’s 7/30-year syndication has priced, seeing strong demand across both lines.
  • Gilt futures are -37 at 96.85. BoE Governor Bailey did not comment on monetary policy in his speech, while Greene’s rhetoric was in line with previous comments.
  • The 10-year Gilt/Bund spread is little changed today at 185bps.
  • Tomorrow’s EU and UK data calendar is light, leaving focus on Central Bank speakers once again.