Core Moves Away From Lows In Recent Trade, 10s Mostly Tighten Vs. Bunds

Bund futures base ahead of 130.50 before recovering to the 130.75 area. No obvious headline flow alongside the latest uptick.

• The contract made a fresh cycle low earlier today (130.52). Next support comes in at the 1.236 projection of the Mar 8-18-27 price swing (130.25). Bulls need to retake the 20-day EMA (131.97) to start turning the technical tide more in their favour.
• Benchmark German yields are 0.5-4.5bp higher as the curve bear steepens. Bears failed to force 10s sustainably above 2.55% during the earlier sell off, with the November 28 high at 2.569% providing the next point of interest.
• In terms of the fundamentals, a bounce from lows in crude oil futures would have provided some fresh pressure, although that move has started to reverse as core global FI bases.
• Elsewhere, the previously flagged syndication announcements provided no real surprises, but helped add weight to a market that is already cautious of this week’s Tsy coupon supply.
• A lack of fresh worry re: Middle Eastern tensions is also weighing on core global FI markets today.
• Note that EGBs are generally tighter to 10-Year Bunds, with the periphery outperforming on the back of the sovereign rating matters identified earlier.