Bunds Continue To Bear Flatten, Spreads Mixed

Bund futures move to fresh session cheaps as the softer than flash (albeit still more than healthy at 55.1) final services PMI data out of the Eurozone and weaker than envisaged Sentix investor confidence do little more than provide intermittent halts to the cheapening derived from wider macro impulses (crude oil futures have nudged higher again as NY filters in but remain comfortably shy of best levels).

• Initial technical support for Bund futures (the 50-DMA) has been meaningfully breached, leaving bears to focus on the May 30 low. Bears need to force a break there to establish more meaningful technical control, with the current move lower still deemed corrective.
• Cash Bunds run 7.0-8.5bp cheaper, bear flattening, but fail to challenge recent extremes in yield high terms.
• BTPS remain the underperformer at the 10-Year point, widening by ~1bp vs. Bunds (after Friday’s notable tightening, which lacked an overt catalyst), while the remainder of the major EGB spreads are little changed to a touch tighter at that maturity point.
• Regional focus is on this afternoon’s ECB speak, which will come courtesy of President Lagarde & Bundesbank chief Nagel, while any spill over from the latest U.S. ISM services print will also be eyed.