Chinese Politburo Musings Help Temper Bid Before Fresh Richening In Tsys Lends Support

Bunds tell a similar story to Gilts in that the rhetoric that came out of the heavily awaited Chinese Politburo gathering allowed the space to edge away from best levels of the day, although a fresh round of richening in U.S. Tsys provided some background support for Bunds thereafter. Still, Bund futures have failed to test session highs on the move, with the previously outlined technical parameters remaining intact. The German cash benchmarks run 4-8bp richer as the curve bull steepens, while 10-Year core/semi-core paper is little changed vs. Bunds. Elsewhere, peripherals are off session wides vs. Bunds, but still sit wider at the 10-Year point, with SPGBs underperforming in light of the outcome of the Spanish national election and worry re: short-term political impasse.