Bund Futures Off Asia Lows, Sovereign Impact Eyed In Periphery

Core global FI markets have found a bit of a base in the last couple of hours.

• That leaves Bund futures -14 at 130.85 (130.64-91 range), with the modest opening gap lower not closed.
• The bearish technical picture remains intact in the contract. Initial meaningful support at the 1.236 projection of the Mar 8-18-27 price swing (130.25), while initial resistance comes in at the 20-day EMA (131.97).
• Initial pressure for Bunds and wider core global bonds seemed to stem from Asia’s reaction to Friday’s core global FI moves, a lack of weekend escalation in geopolitical tensions and U.S. fiscal support for Ukraine.
• BTP futures see some modest outperformance vs. Bunds after S&P chose not to act on the recent fiscal headwinds seen in Italy after hours on Friday
• Elsewhere on the ratings front, GGBs may receive some tailwinds early today, following S&P moving Greece to a positive outlook after hours on Friday.
• Weekend ECB speak didn’t move the needle, as flagged in early EUR STIR bullet.
• Comments from ECB President Lagarde and a couple of appearances from Villeroy are due today.
• On the supply front, the EU could launch its latest syndication as early today. Some desks eye a dual-tranche format including a long bond, while we don’t have much in the way of strong conviction re: potential bonds on offer.
• Elsewhere, we have flagged the potential for syndications from Austria, Finland, France, Greece, Portugal and Spain during this week.