EGBS: Bunds Off Intraday Highs After Overnight Gap Lower Retraced

Bund futures are off intraday highs, currently +14 ticks at 131.87. First resistance remains at 132.08 (July 11 high).

• EGB futures gapped lower overnight alongside Tsys in response to the weekend assassination attempt on former President Trump.
• However, European desks opted to retrace that move at the open, aided by a softer European equity backdrop.

• The German cash curve has bull steepened a little, although both 2s10s and 5s30s remain short of early-July highs.
• Eurozone May industrial production was slightly less weak than expected (-0.6% M/M vs -0.7% cons and -2.9% Y/Y vs -3.6% cons), but was not a market mover

• 10-year peripheral spreads to Bunds now trade a little tighter, after opening slightly wider.
• The ECB decision on Thursday headlines this week’s regional calendar, though no change in policy settings are expected.