Futures Breach Firm Resistance, Wings Lag Belly/Intermediates

The bid in Bunds extends further and seems to be purely flow-orientated, with a lack of meaningful headlines noted thus far, allowing participants to extend yesterday’s post-U.S. CPI rally. That leaves the futures contract +90 or so, with initial firm technical resistance cleared, along with the 20-day EMA (132.71). A sustained break there would allow bulls to turn focus to the July 5 high (133.68), although that is ~80 ticks above prevailing levels. The German cash curve sees 5-7bp of richening, with the belly/intermediates outperforming and 10-Year Bund yields looking back below 2.50%. ECB-dated OIS terminal rate pricing hovers just below 4.00% in deposit rate terms, a handful of bp softer on the day.