October 02, 2024 09:26 GMT
EGBS: Weaker As Global Core FI Pulls Back From Yesterday’s Highs
EGBS
Global core FI has pulled back from yesterday’s highs, with Bund futures -50 ticks today at 135.38. There hasn’t been an obvious catalyst for the move, with markets seemingly deeming yesterday’s rally as overdone, and waiting for further updates on the Israel/Iran situation.
- Impending 10-year Bund supply is likely weighing on German bonds, with regional headline flow otherwise light.
- The German cash curve has bear steepened, reversing much of yesterday’s bull flattening. 5 to 30-year German yields are 4 to 5bps higher at typing.
- The 10-year OAT/Bund spread has widened back to 79bps (vs a low of 74bps yesterday), after PM Barnier’s Parliamentary address did little to ease existing fiscal concerns.
- The Italian August unemployment rate reached its lowest level since September 2007 at 6.2%, but the BTP/Bund spread was little moved (currently +1bp wider at 134bps).
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