Bunds Bid On Lower Than Expected UK CPI

Bunds lean on the softer than expected round of monthly CPI data out of the UK for support.

• Technically, Bund futures have continued to trend down. The contract has breached support at 129.72, the Aug 14 low and a key bear trigger. The break reinforces a bearish theme and confirms a resumption of the primary downtrend. The focus is on 129.30, a Fibonacci projection (which held to the tick this morning). On the upside, key short-term resistance has been defined at 131.49, the Sep 14 high. A break would be a bullish development.
• German data, in the form of slightly firmer than expected M/M PPI and roughly in line Y/Y PPI deflation had no lasting impact given the softer than expected (but still elevated) UK inflation readings.
• That allows the Asia/early European foray below yesterday’s base to be more than reversed, leaving futures running +5.
• Today’s ECB speak includes comments from Panetta, Schnabel and Elderson. Lane speaks after the close from NY.
• Still, it will be the U.S. FOMC decision that receives the most macro attention.
• The wider EGB sphere will see Greece come to market with EUR200mn of on-the-run 10s.