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Core/semi-core Off Session Lows; Peripheries Tighten

EGBS

Core/semi-core EGBs have recovered from intraday lows, with little in the way of fundamental drivers prompting the reversal.

  • Bunds are now -10 ticks at 134.20, +32 ticks above this morning's low. Well-defined technical levels contain price action, with 133.76 (Feb 6 low) the first support and 134.84 (20-day EMA) the first resistance. OATs are -5 ticks 128.74.
  • German and French cash yields are flat to -2bps lower, while 10-year periphery spreads to Bunds have tightened, the latter aided by this morning's gains of Estoxx futures. The 10-year BTP/Bund spread is -1.1bps tighter at 156.2bps at typing.
  • The MNI Policy Team reported this morning that the EU is nearing a deal on fiscal rules this week in three-way institutional talks (see here)
  • The remainder of today's docket features scheduled remarks from ECB's Lane at 1530GMT/1630CET, with comments from Vujcic and the usually hawkish Wunsch also scheduled at 1100GMT/1200GMT respectively.

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