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Bunds Through Yesterday’s Highs & 20-Day EMA

EGBS
HomepageBond Market NewsBulletMarketsFixed Income Bullets

Weaker oil markets and a downtick in benchmark equity index futures provide fresh demand for bonds, as Brent and WTI move to fresh multi-month lows in recent trade.

  • There may have been some delayed, modest feedthrough from the CHF CPI data, which failed to provide an upside surprise despite recent SNB warnings.
  • Bund futures trade through yesterday’s highs as a result, also breaching the 20-day EMA.
  • The 50-day EMA provides the next target for bulls, although is some distance away (131.03 in RXM4 & 131.79 in RXU4). A break there would provide a deeper threat to the bearish technical picture.
  • German yields are 2-3bp lower, with a light flattening bias.
  • EGB spreads are generally little changed to a touch wider, with peripherals leading the widening move. BTPs are ~1.5bp wider, underperforming the most vs. Bunds, meaning that the moves are relatively contained in the grand scheme of things.
  • Geopolitical risk and U.S. stagflation-lite type comments continue to dominate macro discussions.
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Weaker oil markets and a downtick in benchmark equity index futures provide fresh demand for bonds, as Brent and WTI move to fresh multi-month lows in recent trade.

  • There may have been some delayed, modest feedthrough from the CHF CPI data, which failed to provide an upside surprise despite recent SNB warnings.
  • Bund futures trade through yesterday’s highs as a result, also breaching the 20-day EMA.
  • The 50-day EMA provides the next target for bulls, although is some distance away (131.03 in RXM4 & 131.79 in RXU4). A break there would provide a deeper threat to the bearish technical picture.
  • German yields are 2-3bp lower, with a light flattening bias.
  • EGB spreads are generally little changed to a touch wider, with peripherals leading the widening move. BTPs are ~1.5bp wider, underperforming the most vs. Bunds, meaning that the moves are relatively contained in the grand scheme of things.
  • Geopolitical risk and U.S. stagflation-lite type comments continue to dominate macro discussions.