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EGBS: OAT/Bund Spread Little Changed As 2025 Issuance In Line With Expectations

EGBS
EurozoneBulletGlobalFixed Income BulletsRegionMarkets

The 10-year OAT/Bund spread is little changed at ~76.5bps, with the 2025 OAT issuance guidelines falling broadly in line with expectations.

  • Although OAT futures saw a light rally yesterday evening after the French government put forward its 2025 budget to Parliament, the move has retraced this morning.
  • The 2025 deficit target was confirmed at 5.0% of GDP, though the French fiscal oversight body HCFP warned that the government’s forecasts are “fragile” due to optimistic macroeconomic assumptions.
  • Focus now turns to whether PM Barnier’s minority Government will be able to get the budget passed in the National Assembly.
  • France will have its sovereign rating reviewed by Fitch after hours (see our earlier posts for more details). More on the 2025 issuance plans will also be posted in due course.
  • BTPs underperform OATs, ahead of heavy Italian supply at 1000BST/1100CET. The 10-year BTP/Bund spread remains below 130bps though.
  • EUR 3m10y swaption vol is a little lower intraday, now broadly unchanged on the week.
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The 10-year OAT/Bund spread is little changed at ~76.5bps, with the 2025 OAT issuance guidelines falling broadly in line with expectations.

  • Although OAT futures saw a light rally yesterday evening after the French government put forward its 2025 budget to Parliament, the move has retraced this morning.
  • The 2025 deficit target was confirmed at 5.0% of GDP, though the French fiscal oversight body HCFP warned that the government’s forecasts are “fragile” due to optimistic macroeconomic assumptions.
  • Focus now turns to whether PM Barnier’s minority Government will be able to get the budget passed in the National Assembly.
  • France will have its sovereign rating reviewed by Fitch after hours (see our earlier posts for more details). More on the 2025 issuance plans will also be posted in due course.
  • BTPs underperform OATs, ahead of heavy Italian supply at 1000BST/1100CET. The 10-year BTP/Bund spread remains below 130bps though.
  • EUR 3m10y swaption vol is a little lower intraday, now broadly unchanged on the week.