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EGBS: Bund Futures Weaker Post German Data, But Off Lows

EGBS
EurozoneBulletGlobalFixed Income BulletsRegionMarkets

Bund futures fell almost 50 ticks after German flash Q3 GDP and state-level October inflation data printed above consensus estimates. However, futures have moved off intraday lows, currently +7 at 132.58.

  • The German data came after Spanish and French Q3 GDP had already exceeded consensus forecasts. Meanwhile, the Italian reading was a little weaker than expected.
  • ECB-dated OIS price 31bps of easing through the December meeting, down from 35bps before the German data, but off the post-data dovish extreme of 30bps.
  • As such, the German curve has twist flattened, with 2-year yields 3.5bps higher and 30-year yields 3.5bps lower.
  • 10-year peripheral spreads to Bunds are generally wider, with European equity futures dragged lower by weakness in China/Hong Kong overnight.
  • Eurozone Q3 flash GDP is due at 1000GMT/1100CET, while the UK budget and US GDP may also provide spillover potential this afternoon.
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Bund futures fell almost 50 ticks after German flash Q3 GDP and state-level October inflation data printed above consensus estimates. However, futures have moved off intraday lows, currently +7 at 132.58.

  • The German data came after Spanish and French Q3 GDP had already exceeded consensus forecasts. Meanwhile, the Italian reading was a little weaker than expected.
  • ECB-dated OIS price 31bps of easing through the December meeting, down from 35bps before the German data, but off the post-data dovish extreme of 30bps.
  • As such, the German curve has twist flattened, with 2-year yields 3.5bps higher and 30-year yields 3.5bps lower.
  • 10-year peripheral spreads to Bunds are generally wider, with European equity futures dragged lower by weakness in China/Hong Kong overnight.
  • Eurozone Q3 flash GDP is due at 1000GMT/1100CET, while the UK budget and US GDP may also provide spillover potential this afternoon.