Free Trial

EGBS: Weaker Ahead Of ECB Decision, Equities and Crude Weigh

EGBS

The net impact of the rally in equities and crude that began yesterday afternoon has continued to weigh on FI this morning. Bund futures are -43 ticks today at 134.93. Initial firm support in Bunds remains some way off at 134.01 (the 20-day EMA), though.

  • Regional focus remains on this afternoon’s ECB decision, where a 25bps cut is unanimously expected. The decision is at 1315BST/1415CET, before the press conference at 1345BST.
  • Our baseline scenario for the guidance looks for President Lagarde to indicate a willingness to cut policy rates further but refuse to be drawn into speculating on the October meeting.
  • The German cash curve has lightly bear flattened, but 2s10s remains just shy of YTD steeps.
  • 10-year peripheral spreads to Bunds are tighter on the back of the equity rally. Today’s 3/7-year BTP supply was digested smoothly. 
135 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.

The net impact of the rally in equities and crude that began yesterday afternoon has continued to weigh on FI this morning. Bund futures are -43 ticks today at 134.93. Initial firm support in Bunds remains some way off at 134.01 (the 20-day EMA), though.

  • Regional focus remains on this afternoon’s ECB decision, where a 25bps cut is unanimously expected. The decision is at 1315BST/1415CET, before the press conference at 1345BST.
  • Our baseline scenario for the guidance looks for President Lagarde to indicate a willingness to cut policy rates further but refuse to be drawn into speculating on the October meeting.
  • The German cash curve has lightly bear flattened, but 2s10s remains just shy of YTD steeps.
  • 10-year peripheral spreads to Bunds are tighter on the back of the equity rally. Today’s 3/7-year BTP supply was digested smoothly.