Bunds Just Off Best Levels, Peripherals Wider

Bund bulls have failed to better yesterday’s high in futures, with the grind away from session cheaps coming to a halt in recent trade, leaving the contract a little under 30 ticks better off on the day, with the wider cash curve twist flattening as the major benchmarks are left 1.5bp cheaper to 1.5bp richer, as 5- to 10-Year paper runs little changed.

• Wider core & semi-core moves see similar moves, leaving 10-Year spreads vs. Bunds little changed to a touch wider, while peripheral paper widens, with GGBs underperforming the most.
• The move away from session cheaps came alongside a broader move in global FI markets, with core EGBs following the broader market moves, as opposed to setting the pace.
• Regional headline flow remains limited into the weekend, with the observance of Bastille Day in France detracting from volumes and liquidity, even though OATs remain open (futures there run at approximately 60% of the recent norms for this time in the session).
• French and Spanish issuance details have filtered out, as covered earlier.