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EGB/Gilt - Recover off the lows this afternoon

BONDS
  • A more steady afternoon session for EGBs and Bund.
  • Contracts in Europe took their cue from the sell off in Treasuries following a decent US Personal spending data.
  • Govies are off their lows after the MNI Chicago PMI miss.
  • Month End extension are small and should have limited impact.
  • But, there's a small upside revision for Europe Month End Govies , with the index rising to +0.09yr vs +0.07yr previously.
  • Given that the volumes are way below averages, a late bid going into EGBs can't be ruled out.
  • Peripherals, sees BTP/Bund, now at widest level since June 2020.
  • In terms of level, with most likely to look at 190.82 as the next area of interest, now trading at 183.2bps.
  • Continued tightening of the Gilt/Bund spread, by another 1.6bp today.
  • The spread now trends to lowest (tightest) level since July 2021.
  • Next immediate targets comes at 95.50, the 50% retrace of the 2020/2022 widening.
  • Looking ahead, after markets, Fitch rating on Germany and DBRS on Italy
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  • A more steady afternoon session for EGBs and Bund.
  • Contracts in Europe took their cue from the sell off in Treasuries following a decent US Personal spending data.
  • Govies are off their lows after the MNI Chicago PMI miss.
  • Month End extension are small and should have limited impact.
  • But, there's a small upside revision for Europe Month End Govies , with the index rising to +0.09yr vs +0.07yr previously.
  • Given that the volumes are way below averages, a late bid going into EGBs can't be ruled out.
  • Peripherals, sees BTP/Bund, now at widest level since June 2020.
  • In terms of level, with most likely to look at 190.82 as the next area of interest, now trading at 183.2bps.
  • Continued tightening of the Gilt/Bund spread, by another 1.6bp today.
  • The spread now trends to lowest (tightest) level since July 2021.
  • Next immediate targets comes at 95.50, the 50% retrace of the 2020/2022 widening.
  • Looking ahead, after markets, Fitch rating on Germany and DBRS on Italy