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EGBS: Bund Futures Unwind A Portion Of Yesterday’s Rally

EGBS
BulletEurozoneFixed Income BulletsMarkets

Major EGB futures have moved off session lows, aided by the passing of this morning’s Spanish supply. Bund futures are -17 ticks at 131.29 though, unwinding a little of yesterday’s sharp UK/US-CPI induced rally.

  • The technical trend in Bund futures remains bearish for now, but yesterday’s rally highlights a possible short-term reversal signal - a bullish engulfing candle.
  • A continuation higher would open 132.66, the 20-day EMA. The bear trigger has been defined at 130.28, the Jan 14 low, and a break would resume the downtrend.
  • German cash yields are up to 1bp higher today, with the curve lightly steepening.
  • Most 10-year EGB spreads to Bunds are little changed, though SPGBs and PGBs slightly underperform. Today’s Bono/Obli auction was reasonably well digested, with the top of the E5.0-6.0bln target range sold.
  • Books remain open for today’s 30-year E3bln WNG Irish syndication.
  • The Eurozone trade balance exceeded expectations in November, while German and Italian December HICP confirmed flash estimates.
  • The accounts of the ECB’s December decision are due at 1230GMT/1330CET.
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Major EGB futures have moved off session lows, aided by the passing of this morning’s Spanish supply. Bund futures are -17 ticks at 131.29 though, unwinding a little of yesterday’s sharp UK/US-CPI induced rally.

  • The technical trend in Bund futures remains bearish for now, but yesterday’s rally highlights a possible short-term reversal signal - a bullish engulfing candle.
  • A continuation higher would open 132.66, the 20-day EMA. The bear trigger has been defined at 130.28, the Jan 14 low, and a break would resume the downtrend.
  • German cash yields are up to 1bp higher today, with the curve lightly steepening.
  • Most 10-year EGB spreads to Bunds are little changed, though SPGBs and PGBs slightly underperform. Today’s Bono/Obli auction was reasonably well digested, with the top of the E5.0-6.0bln target range sold.
  • Books remain open for today’s 30-year E3bln WNG Irish syndication.
  • The Eurozone trade balance exceeded expectations in November, while German and Italian December HICP confirmed flash estimates.
  • The accounts of the ECB’s December decision are due at 1230GMT/1330CET.