Bunds reverse slight overnight weakness to open flat to the close

Bund futures have reversed their overnight weakness as Europeans get into the office, spiking just over 10 ticks to be almost flat to yesterday's close. BTPs have also opened pretty much flat to yesterday's close.

• These moves come on the back of a bounce for US equity futures off of their lows overnight. European equity futures are a little higher but have seen much less of a rebound than in the US.
• As expected, President Macron followed Chancellor Merkel in imposing a national lockdown (albeit both less stringent than earlier in the year). While the German restrictions will be in place for a month, France has been less explicit about how long the new measures will be in place.
• Focus today will be on the ECB meeting with the ECB more likely to pave the way for more easing in December rather than release announce new measures at today's meeting. However, the risk of further easing today is non-negligible. See our ECB preview for more.
• Our technical analyst points to a doji formation for Bunds yesterday signaling uncertainty in the market but notes that we also traded above the key resistance at 176.29 before reverting lower. A resumption of the uptrend would open 176.57, the 1.618 projection of Aug 28- Sep9 rally while a deeper pullback would expose initial support at the Oct27 low of 175.27.