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EGBS: Futures Trading Heavy Ahead of ECB Decision

EGBS
BulletEurozoneFixed Income BulletsMarkets

Major EGB futures have traded heavily this morning, with crude oil futures consolidating yesterday’s rally and Italian supply weighing. Bund futures are -40 ticks today at 135.55. 

  • Bund futures trade just above the 20-day EMA at 135.51, with next support at 135.04 (2.208% 10-year yield level).
  • The current bearish corrective cycle in Bund futures remains in play and the move down is allowing a recent overbought condition to unwind.
  • The surprise 50bp SNB cut provided brief support to EGBs, but the less dovish outlook in the policy statement and press conference eventually dominated.
  • German yields are up to 4bps higher today, with the curve steepening a little.
  • Italy concluded its 2024 issuance with E8.5bln of 3/7/11/30-year BTPs this morning.
  • The 10-year BTP/Bund spread is 2.5bps wider today at 109bps.
  • Focus turns to the ECB decision at 1315GMT/1415CET. Analysts and markets are heavily tilted towards a 25bp cut, with focus on the guidance and updated macroeconomic projections. 
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Major EGB futures have traded heavily this morning, with crude oil futures consolidating yesterday’s rally and Italian supply weighing. Bund futures are -40 ticks today at 135.55. 

  • Bund futures trade just above the 20-day EMA at 135.51, with next support at 135.04 (2.208% 10-year yield level).
  • The current bearish corrective cycle in Bund futures remains in play and the move down is allowing a recent overbought condition to unwind.
  • The surprise 50bp SNB cut provided brief support to EGBs, but the less dovish outlook in the policy statement and press conference eventually dominated.
  • German yields are up to 4bps higher today, with the curve steepening a little.
  • Italy concluded its 2024 issuance with E8.5bln of 3/7/11/30-year BTPs this morning.
  • The 10-year BTP/Bund spread is 2.5bps wider today at 109bps.
  • Focus turns to the ECB decision at 1315GMT/1415CET. Analysts and markets are heavily tilted towards a 25bp cut, with focus on the guidance and updated macroeconomic projections.