Bunds Reverse All Post ECB-Decision Gains

Bunds traded in a ~25 tick range through the ECB press conference but have moved a few ticks lower since its conclusion, trading broadly at pre-ECB decision levels.

• Details of the US PPI report provided a modest tailwind between the ECB decision and presser.
• The presser offered little in the way of explicit guidance for a rate cut in June, though Lagarde acknowledged that “a few” Governing Council members had already attained sufficient confidence in the inflation outlook to consider easing policy.
• Bunds are -35 ticks at 131.59 at typing.
• The 10-year BTP/Bund spread is 3.2bps wider at 140.4bps but sits off the day’s widest levels.
• Little net change in ECB-dated OIS pricing: 19bps of rate cuts priced through the June meeting and 76bps of cuts priced through the remainder of ’24.