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EGBS: Spreads Tighten As Risk Sentiment Recovers

EGBS
CEEMEAEurozoneBulletGlobalFixed Income BulletsRegion

EGBs have been pressures alongside wider core FI this morning, with an ongoing recovery in risk sentiment seeing Bunds underperform peers.

  • Dovish commentary from BoJ Deputy Governor Uchida did not materially impact Bund futures overnight, nor did the stronger-than-expected German industrial production reading earlier.
  • 10-year spreads to Bunds have tightened amid the rally in European equities, with the BTP/Bund spread 2bps tighter at 143bps and the OAT/Bund spread back at 74bps (from over 80bps on Monday).
  • Bund futures are 101 ticks lower today at 134.02, through the first support of 134.39 (Aug 2 low). The 20-day EMA at 133.25 provides the next target for bears.         
  • The German and French cash curves have bear steepened, with the German 2s10s at its steepest since December 2022 at -15.9bps.
  • Today’s 15-year Bund supply was digested smoothly. 
  • The remainder of today’s macro calendar is light.
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EGBs have been pressures alongside wider core FI this morning, with an ongoing recovery in risk sentiment seeing Bunds underperform peers.

  • Dovish commentary from BoJ Deputy Governor Uchida did not materially impact Bund futures overnight, nor did the stronger-than-expected German industrial production reading earlier.
  • 10-year spreads to Bunds have tightened amid the rally in European equities, with the BTP/Bund spread 2bps tighter at 143bps and the OAT/Bund spread back at 74bps (from over 80bps on Monday).
  • Bund futures are 101 ticks lower today at 134.02, through the first support of 134.39 (Aug 2 low). The 20-day EMA at 133.25 provides the next target for bears.         
  • The German and French cash curves have bear steepened, with the German 2s10s at its steepest since December 2022 at -15.9bps.
  • Today’s 15-year Bund supply was digested smoothly. 
  • The remainder of today’s macro calendar is light.