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Focus on Italian supply this morning

BUNDS
  • A lighter overnight session for Bund, and the contract is at circa yesterday's mid range.
  • The move higher post the US core CPI miss has lost some steam, as it opened with a lower gap., and seeing early selling interest, with supply coming the forefront for EGBs, large for BTPs.
  • Remaining data are the Spanish Final CPI, and Italian IP.
  • On the other side of the pond, most of the focus will be the PPI.
  • SUPPLIES: All the attention will be on supplies in early trade, massive for the BTP, with 2029s, 2025, and 2052 (equates to 52.9k BTP) should weigh into the bidding deadline.
  • The 2040 is for EU750mln, won't have an impact.
  • For Germany, we get the Bund EU4bn 10yr (equates to ~26.5k Bund). And finally, US $20bn 30yr later in the session.

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