EGBS: 10-year Supply Weighs On Bund Futures

Bund futures are -6 at 130.32, lagging OAT and BTP counterparts.

• The impending launch of the new 10-year benchmark has weighed on Bund futures this morning, while OATs and BTPs have found support from latest political developments in France.
• Over 200 candidates from centrist/left-wing parties have withdrawn from second round elections in France, in order to limit right-wing gains.
• The Eurozone June services/composite PMIs saw small upward revisions, while PPI was a little below consensus – neither were major market movers.
• The German cash curve has twist flattened, with 2-year yields ~4bps higher and 30-year yields around 1bp lower at typing.
• 10-year peripheral spreads to Bunds have tightened this morning, though the 10-year German benchmark roll has overstated these moves somewhat.
• We don’t expect today’s remaining ECB speakers to add much new to the near-term policy debate, with broader focus on this afternoon’s round of US macro data.