Bund Futures Drift Higher As Equities Remain Pressured

Bunds have drifted higher through the morning, taking cues from softer European equity futures. Today’s range has nonetheless been narrow (just 31 ticks), with Bunds +23 at 132.61 at typing.

• The June 25 high at 132.80 provides the first resistance, before the bull trigger at 133.21 (June 14 high).
• There was little net reaction in EGBs to the softer-than-expected UK CPI report, with temporary factors likely driving the surprise in services inflation.
• Eurozone final June HICP confirmed flash estimates, with headline at 2.5% Y/Y and core 2.9% Y/Y.
• The German cash curve has lightly bull flattened, despite impending 30-year supply at 1030BST.
• The softer European equity backdrop has pulled 10-year peripheral spreads away from intraday tightest levels, with spreads slightly wider on the day.
• Tomorrow’s ECB meeting remains this week’s key regional focus.