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GERMANY: Economy Ministry Lowers 2025 Growth Forecast As Expected

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

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EGBS: Futures Rally On Weak Q4 Flash GDP Data

EGBS
BulletEurozoneFixed Income BulletsMarkets

Major EGB futures have rallied following weak flash Q4 GDP prints in France, Germany and Italy this morning. Eurozone-wide GDP growth was 0.0% Q/Q, below consensus estimates of 0.1% and the ECB’s projection of 0.2%. Today’s regional data deluge comes ahead of the ECB decision at 1315GMT/1415CET, where a 25bp cut is unanimously expected and fully priced in OIS markets.

  • Bund futures are +46 ticks at 131.80, The 20-day EMA at 131.97 continues to cap upside, clearance of which is required to strengthen a bullish theme.
  • German cash yields are 4.5 to 6.0bps lower across the curve, with the belly outperforming. Year-end ECB cut pricing has deepened to 94.5bps (vs 90bps at yesterday’s close).
  • 10-year peripheral spreads to Bunds have widened up to 0.5bps despite European equity strength and dovish ECB repricing. Today’s Italian supply was digested smoothly, but will have contained rallies in the run-up to the 1000GMT bidding deadline.
  • With no changes in key guidance expected at the ECB decision, we expect commentary around US policy spillovers to set the tone for the press conference.
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Major EGB futures have rallied following weak flash Q4 GDP prints in France, Germany and Italy this morning. Eurozone-wide GDP growth was 0.0% Q/Q, below consensus estimates of 0.1% and the ECB’s projection of 0.2%. Today’s regional data deluge comes ahead of the ECB decision at 1315GMT/1415CET, where a 25bp cut is unanimously expected and fully priced in OIS markets.

  • Bund futures are +46 ticks at 131.80, The 20-day EMA at 131.97 continues to cap upside, clearance of which is required to strengthen a bullish theme.
  • German cash yields are 4.5 to 6.0bps lower across the curve, with the belly outperforming. Year-end ECB cut pricing has deepened to 94.5bps (vs 90bps at yesterday’s close).
  • 10-year peripheral spreads to Bunds have widened up to 0.5bps despite European equity strength and dovish ECB repricing. Today’s Italian supply was digested smoothly, but will have contained rallies in the run-up to the 1000GMT bidding deadline.
  • With no changes in key guidance expected at the ECB decision, we expect commentary around US policy spillovers to set the tone for the press conference.