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EGBS: Softer Following Heavy Italian Supply, Broader FI Pullback

EGBS
EurozoneBulletGlobalFixed Income BulletsRegionMarkets

Bund futures are over 50 ticks off overnight highs at 133.04 (-25 ticks vs yesterday’s settlement), with heavy Italian supply weighing on EGBs this morning and broader FI markets extending lower at typing.

  • Key support in Bunds remains at 132.65 (Sep 2 low), with initial resistance at 133.90 (50-day EMA).
  • The 3/7/15/24-year BTP auctions saw acceptable results, but major EGB futures were already moving lower and the results did little to change the trend.
  • The 10-year BTP/Bund spread is off intraday wides, but remains 1.5bps wider at 129bps.
  • The OAT/Bund spread is little changed at ~76.5bps, with the 2025 OAT issuance guidelines falling broadly in line with expectations.
  • Focus now turns to whether PM Barnier’s minority Government will be able to get the 2025 budget (presented yesterday) passed in the National Assembly.
  • The US PPI report headlines Friday’s global macro calendar at 1330BST/1430CET.
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Bund futures are over 50 ticks off overnight highs at 133.04 (-25 ticks vs yesterday’s settlement), with heavy Italian supply weighing on EGBs this morning and broader FI markets extending lower at typing.

  • Key support in Bunds remains at 132.65 (Sep 2 low), with initial resistance at 133.90 (50-day EMA).
  • The 3/7/15/24-year BTP auctions saw acceptable results, but major EGB futures were already moving lower and the results did little to change the trend.
  • The 10-year BTP/Bund spread is off intraday wides, but remains 1.5bps wider at 129bps.
  • The OAT/Bund spread is little changed at ~76.5bps, with the 2025 OAT issuance guidelines falling broadly in line with expectations.
  • Focus now turns to whether PM Barnier’s minority Government will be able to get the 2025 budget (presented yesterday) passed in the National Assembly.
  • The US PPI report headlines Friday’s global macro calendar at 1330BST/1430CET.