MNI China Daily Summary: Monday, November 18

MNI BRIEF: China’s October Youth Employment Rate Remains High

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EZ/UK Bond Supply Calendar: EU Synd; SK, BE Auction on Monday

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MNI EXCLUSIVE: German Turmoil Dashes EU's Joint-Funding Hopes -Officials

FED: Powell's Time Looks Up, Replacement Could Be Less Willing To Cut Rates?

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EGBS: Short-end Leads Sell-off In EGBs, Spreads To Bunds Mixed

EGBS
EurozoneBulletGlobalFixed Income BulletsRegionMarkets

The short-end has led today’s sell-off in EGBs, with 2-year Schatz yields up ~6bps and Schatz futures -12.5 at 106.685 – just off intraday lows. Initial support in Schatz futures is the Nov 8 low at 106.645.

  • ECB-dated OIS price 138bps of cuts through December 2025 down from ~145bps at Friday’s close.
  • This morning, Bundesbank President Nagel provided customary hawkish rhetoric around the inflationary impact of trade fragmentation, but short-end pressure was already prevalent before his comments crossed.
  • Bund futures are -54 ticks at 131.66, through last Friday’s low.
  • Anticipation of this week’s heavy sovereign supply calendar (we estimate net flows at E31.3bln vs -E1.2bln last week) may be adding further pressure to EGBs this morning.
  • 10-year EGB spreads to Bunds are mixed, with Irish bonds outperforming on positive ratings action from S&P on Friday and DSL spreads widening amid an uptick in political uncertainty.
  • 10-year peripheral (ex-Ireland) and OAT spreads to Bunds are biased wider given the hawkish ECB repricing.
  • The Eurozone September trade surplus was a little larger than expected, with Q3 current account data due tomorrow.
  • ECB’s Lane and Lagarde are scheduled to speak this afternoon. 
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The short-end has led today’s sell-off in EGBs, with 2-year Schatz yields up ~6bps and Schatz futures -12.5 at 106.685 – just off intraday lows. Initial support in Schatz futures is the Nov 8 low at 106.645.

  • ECB-dated OIS price 138bps of cuts through December 2025 down from ~145bps at Friday’s close.
  • This morning, Bundesbank President Nagel provided customary hawkish rhetoric around the inflationary impact of trade fragmentation, but short-end pressure was already prevalent before his comments crossed.
  • Bund futures are -54 ticks at 131.66, through last Friday’s low.
  • Anticipation of this week’s heavy sovereign supply calendar (we estimate net flows at E31.3bln vs -E1.2bln last week) may be adding further pressure to EGBs this morning.
  • 10-year EGB spreads to Bunds are mixed, with Irish bonds outperforming on positive ratings action from S&P on Friday and DSL spreads widening amid an uptick in political uncertainty.
  • 10-year peripheral (ex-Ireland) and OAT spreads to Bunds are biased wider given the hawkish ECB repricing.
  • The Eurozone September trade surplus was a little larger than expected, with Q3 current account data due tomorrow.
  • ECB’s Lane and Lagarde are scheduled to speak this afternoon.