Bund Retracement From 3.00% Extends Further

Bunds continue to grind away from session lows, with the benchmark futures contract +15, a little shy of recent session highs.

• Recent flow has seen a 6.6K block in bund futures, price action points to a buy, although it’s harder to be sure when looking at quoted levels at the time that the trade was registered.
• German cash benchmarks sit 1.0-6.5bp richer on the day as the curve bull flattens, with bears failing to solidify this morning’s brief and limited showing above 3.00% in 10-Year yields.
• Softer than expected eurozone retail sales data wouldn’t have harmed the bid, while positive revisions to final Eurozone services & composite PMIs did little to hinder the rally.
• German 2s10s tick away from the multi-month highs registered this morning, while 5s30s move off YtD steeps registered early today.
• EGBs run a touch wider vs. Bunds on the day, although the move is contained.
• BTPs were not sensitive to a RTRS sources piece noting that “Italy risks collecting minimal proceeds from a windfall tax on banks after it gave lenders the option to set aside money instead of paying the levy.”
• 10-Year PGBs are incrementally wider on the day after a couple of sessions of compression (with the latter related to a sovereign rating upgrade and reduced issuance requirements for the remainder of ’23).