BUNDS: Bund Futures Retrace Overnight Weakness, PMIs In Focus This Morning

Bund futures are 132.30, unchanged versus yesterday’s settlement levels as core FI recovered from yesterday evening’s (post-settlement) lows overnight.

• First support in Bunds remains at 132.66 (Jul 17 high), with the 50-day EMA providing support at 131.74.
• Ongoing equity weakness in Asia, partially spurred by weak global tech earnings in the US overnight, aided the recovery in USTs/Bunds.
• Yesterday’s strong 2-year UST auction helped core FI reach new intraday highs, but that move quickly faded.
• German GfK consumer confidence was stronger than expected at -18.4 (vs -21.0 cons, -21.6 prior), but was not a major market mover.
• Germany will return to the market today to sell E5bln of the 2.60% Aug-34 Bund.
• Today’s July flash PMIs headline the data calendar, with Eurozone focus on the ongoing divergence between manufacturing and services activity.
• The BoC decision this afternoon will also garner interest, with today’s ECB-speak not expected to move the needle (more in our upcoming EUR STIR post).