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BONDS: EGBs & Gilts Tighten To Bunds As European Equities Rally

BONDS
BulletMarketsFixed Income Bullets

{EU}{GB} BONDS: Firmer European equities and a contained uptick in crude oil prices apply weight to bonds this morning.

  • Bund futures away from yesterday’s high as a result, last -35 at 134.98.
  • Initial support and resistance at 134.34/135.46, recent bull cycle intact.
  • German yields 3-5bp higher, curve bear flattens, bulls failed to test 2.00% in 10s.
  • Schatz supply passed smoothly.
  • The bid in equities promotes EGB tightening to Bunds, with BTPs outperforming, ~4bp tighter on the day.
  • OATs are nearly 4bp tighter on the session vs. Bunds, we wrote a little more on French paper earlier, with tomorrow’s no-confidence vote against the government looming.
  • ECB speak not moving the needle thus far.
  • 27.5bp of cuts priced for this month’s meeting vs. 29bp early today, as Bunds weaken. 160bp of cuts priced through Dec ’25. We may get some pre-meeting steer from President Lagarde tomorrow.
  • Gilts relatively resilient, futures stick in the upper end of yesterday’s range, last -1 at 96.11.
  • Initial support and resistance at 95.78/96.31, bullish corrective cycle in the contract remains in play.
  • UK yields 1-2bp higher on the day.
  • 30-Year gilt supply was absorbed smoothly.
  • 10-Year spread to Bunds ~2bp tighter on the day at 215.5bp, after registering a fresh cycle closing high Monday.
  • BoE pricing little changed on the day, last showing 30.5bp of cuts through March and 83bp through Dec ’25.
  • Comments from ECB’s Panetta and U.S. JOLTS data eyed this afternoon, as well as Fedspeak from Daly, Kugler & Goolsbee.
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{EU}{GB} BONDS: Firmer European equities and a contained uptick in crude oil prices apply weight to bonds this morning.

  • Bund futures away from yesterday’s high as a result, last -35 at 134.98.
  • Initial support and resistance at 134.34/135.46, recent bull cycle intact.
  • German yields 3-5bp higher, curve bear flattens, bulls failed to test 2.00% in 10s.
  • Schatz supply passed smoothly.
  • The bid in equities promotes EGB tightening to Bunds, with BTPs outperforming, ~4bp tighter on the day.
  • OATs are nearly 4bp tighter on the session vs. Bunds, we wrote a little more on French paper earlier, with tomorrow’s no-confidence vote against the government looming.
  • ECB speak not moving the needle thus far.
  • 27.5bp of cuts priced for this month’s meeting vs. 29bp early today, as Bunds weaken. 160bp of cuts priced through Dec ’25. We may get some pre-meeting steer from President Lagarde tomorrow.
  • Gilts relatively resilient, futures stick in the upper end of yesterday’s range, last -1 at 96.11.
  • Initial support and resistance at 95.78/96.31, bullish corrective cycle in the contract remains in play.
  • UK yields 1-2bp higher on the day.
  • 30-Year gilt supply was absorbed smoothly.
  • 10-Year spread to Bunds ~2bp tighter on the day at 215.5bp, after registering a fresh cycle closing high Monday.
  • BoE pricing little changed on the day, last showing 30.5bp of cuts through March and 83bp through Dec ’25.
  • Comments from ECB’s Panetta and U.S. JOLTS data eyed this afternoon, as well as Fedspeak from Daly, Kugler & Goolsbee.