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EGBS: Bund Futures Consolidate Early Rally, Little Impact From GDP and IP Data

EGBS

Bund futures have consolidated their early rally, but remain -9 ticks at 131.74, well short of Tuesday’s highs. 

  • Lower-than-expected Eurozone September industrial production (-2.0% M/M vs -1.4% cons, though in line with MNI’s tracking) was not a market mover. The second estimate of Q3 GDP was also in line with the advance read at 0.4% Q/Q.
  • The German curve has twist steepened, with 2s10s up 3.2bps at 25.0bps.
  • German ASW tightening has been apparent again this morning, with Bobl, Bund & Buxl vs. 3-month Euribor spreads moving back towards cycle/all-time lows.
  • The 1.5% uptick in European equities has helped the BTP/Bund spread tighten 1.5bps to 122.5bps.
  • The accounts of the ECB's October monetary policy meeting (1230GMT) are unlikely to provide many fresh signals for markets, with more focus on today’s US data (PPI, jobless claims).
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Bund futures have consolidated their early rally, but remain -9 ticks at 131.74, well short of Tuesday’s highs. 

  • Lower-than-expected Eurozone September industrial production (-2.0% M/M vs -1.4% cons, though in line with MNI’s tracking) was not a market mover. The second estimate of Q3 GDP was also in line with the advance read at 0.4% Q/Q.
  • The German curve has twist steepened, with 2s10s up 3.2bps at 25.0bps.
  • German ASW tightening has been apparent again this morning, with Bobl, Bund & Buxl vs. 3-month Euribor spreads moving back towards cycle/all-time lows.
  • The 1.5% uptick in European equities has helped the BTP/Bund spread tighten 1.5bps to 122.5bps.
  • The accounts of the ECB's October monetary policy meeting (1230GMT) are unlikely to provide many fresh signals for markets, with more focus on today’s US data (PPI, jobless claims).