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EGBS: Bunds Off Highs, Fed Speculation Remains Dominant

EGBS
EurozoneBulletGlobalFixed Income BulletsRegionMarkets

Bund futures reached an intraday high of 135.39 before fading, now +23 ticks today at 135.27. First resistance is 135.49 (Sep 11 high), which shields the bull trigger at 135.66 (Aug 5 high).

  • Speculation around whether the Fed will deliver a 25bp or 50bp rate cut tomorrow remains the dominant theme across global markets.
  • The German September ZEW survey was weaker than expected on both the expectations and current conditions metrics, but did not move markets (the ZEW is an investor-based survey, so provides limited insight into actual economic conditions).
  • The German cash curve has lightly bull flattened, with yields 1 to 2.5bps lower.
  • European equity futures are 0.7% higher today, allowing the 10-year BTP/Bund to spread to trade below 135bps – its tightest in almost a month.
  • The 10-year OAT/Bund spread has widened 1bp, now back at 72bps after briefly falling below 70bps last week.
  • Broader macro focus turns to the US retail sales and industrial production reports this afternoon.
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Bund futures reached an intraday high of 135.39 before fading, now +23 ticks today at 135.27. First resistance is 135.49 (Sep 11 high), which shields the bull trigger at 135.66 (Aug 5 high).

  • Speculation around whether the Fed will deliver a 25bp or 50bp rate cut tomorrow remains the dominant theme across global markets.
  • The German September ZEW survey was weaker than expected on both the expectations and current conditions metrics, but did not move markets (the ZEW is an investor-based survey, so provides limited insight into actual economic conditions).
  • The German cash curve has lightly bull flattened, with yields 1 to 2.5bps lower.
  • European equity futures are 0.7% higher today, allowing the 10-year BTP/Bund to spread to trade below 135bps – its tightest in almost a month.
  • The 10-year OAT/Bund spread has widened 1bp, now back at 72bps after briefly falling below 70bps last week.
  • Broader macro focus turns to the US retail sales and industrial production reports this afternoon.