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EGBS: Bunds Off Highs As Risk Assets Stabilises, Peripherals Still Wider

EGBS
EurozoneBulletGlobalFixed Income BulletsRegionMarkets

The stabilisation of European equity and crude oil prices has helped Bunds away from intraday highs, though futures remain +25 ticks today at 134.18.

  • The Aug 29 high in Bunds is still intact at 134.49. A breach of this level would strengthen a near-term bullish condition.
  • Risk sentiment remains subdued though, which has prompted BTP futures to underperform (+7 today at 119.02) and broader 10-year peripheral spreads to Bunds widen ~1.5bps.
  • The Eurozone August final services PMI was slightly weaker than implied by the flash release, though the Olympics-driven French print was confirmed at 55.0.
  • Meanwhile, commentary from several ECB speakers continues to point to a rate cut in September, with little firm guidance provided beyond that gathering.
  • The German cash curve has bull steepened, with yields -3.5 to -1.5bps lower at typing. The bidding deadline for today’s 15-year Bund supply is at 1030BST/1130CET.
  • Broader focus turns to the Bank of Canada decision and US job openings data this afternoon, while BdF’s Villeroy is scheduled to appear on a panel at 1200BST.
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The stabilisation of European equity and crude oil prices has helped Bunds away from intraday highs, though futures remain +25 ticks today at 134.18.

  • The Aug 29 high in Bunds is still intact at 134.49. A breach of this level would strengthen a near-term bullish condition.
  • Risk sentiment remains subdued though, which has prompted BTP futures to underperform (+7 today at 119.02) and broader 10-year peripheral spreads to Bunds widen ~1.5bps.
  • The Eurozone August final services PMI was slightly weaker than implied by the flash release, though the Olympics-driven French print was confirmed at 55.0.
  • Meanwhile, commentary from several ECB speakers continues to point to a rate cut in September, with little firm guidance provided beyond that gathering.
  • The German cash curve has bull steepened, with yields -3.5 to -1.5bps lower at typing. The bidding deadline for today’s 15-year Bund supply is at 1030BST/1130CET.
  • Broader focus turns to the Bank of Canada decision and US job openings data this afternoon, while BdF’s Villeroy is scheduled to appear on a panel at 1200BST.