€ Supply Applies Weight

A brisk start for € IG supply, coupled with the market making room for today’s regional sovereign issuance (headlined by the long 10-Year SPGB), allows the broader EGB space to cheapen in recent trade and spreads vs. Bunds (at the 10-Year point) to widen.

• BTPs continue to give back the tightening that was seen on Friday (which lacked an overt headline driver and was seemingly driven by broader cross-market flows).
• Bunds twist flatten on the day, with the major benchmarks on that curve running 3bp cheaper to 1.5bp richer. Core/semi-core curves also twist flatten, while BTPs bear flatten.
• As noted elsewhere, ECB speak headlines the regional docket today, with de Guindos, Panetta, Knot and Vujcic all slated. All of those individuals have spoken within the last week or so, perhaps limiting the scope for meaningful market impact. That could leave the aforementioned supply dynamics at the fore.