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EGBS: Bund Futures Recover From Overnight Lows

EGBS
EurozoneBulletGlobalFixed Income BulletsRegionMarkets

Bund futures are +20 ticks at 132.34, having fully recovered from yesterday evening’s light sell-off (which was driven by cautious comments from Fed Chair Powell).

  • The uptick in US Treasuries has set the tone for core FI this morning, though Bund futures appeared to find some support from a report that the German Finance Minister will not submit a so-called adjustment proposal for the 2025 federal budget to the Bundestag's budget committee.
  • The German cash curve has lightly bull flattened, with 30-year yields ~1.5bps lower today. There has been a modest ASW tightening, keeping spreads around cycle/all-time lows.
  • The EC’s Autumn projections for GDP growth and headline inflation were broadly consistent with the ECB’s latest forecasts, with lower interest rates and rising real disposable incomes helping to support a recovery in consumption from next year.
  • 10-year peripheral spreads to Bunds are biased a little tighter, with European equities off session lows.
  • French final October HICP inflation saw a one tenth upward revision to 1.6% Y/Y, while the Italian reading confirmed flash estimates of 1.0% Y/Y.
  • ECB's Panetta, Lane and Cipollone are scheduled to speak later today, with broader focus on this afternoon's US retail sales, import/export prices and industrial production data. 
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Bund futures are +20 ticks at 132.34, having fully recovered from yesterday evening’s light sell-off (which was driven by cautious comments from Fed Chair Powell).

  • The uptick in US Treasuries has set the tone for core FI this morning, though Bund futures appeared to find some support from a report that the German Finance Minister will not submit a so-called adjustment proposal for the 2025 federal budget to the Bundestag's budget committee.
  • The German cash curve has lightly bull flattened, with 30-year yields ~1.5bps lower today. There has been a modest ASW tightening, keeping spreads around cycle/all-time lows.
  • The EC’s Autumn projections for GDP growth and headline inflation were broadly consistent with the ECB’s latest forecasts, with lower interest rates and rising real disposable incomes helping to support a recovery in consumption from next year.
  • 10-year peripheral spreads to Bunds are biased a little tighter, with European equities off session lows.
  • French final October HICP inflation saw a one tenth upward revision to 1.6% Y/Y, while the Italian reading confirmed flash estimates of 1.0% Y/Y.
  • ECB's Panetta, Lane and Cipollone are scheduled to speak later today, with broader focus on this afternoon's US retail sales, import/export prices and industrial production data.