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German Curve Sits Marginally Flatter Ahead of 12, 15yr Bund Auction

BUNDS
  • Dec-23 Bunds saw some support at the European open, helping tip prices briefly back above the 129.00 handle to just a few ticks shy of next resistance at yesterday's 129.12 highs. Any strength through here opens levels not seen since Oct16 and would extend the streak of higher highs to four consecutive sessions.
  • For now, the near-term bounce is deemed corrective, with the medium-term trend still pointed lower. This leaves the 50-day EMA as a key level going forward (intersecting at 129.57). A break above here would strengthen any corrective move higher.
  • The German curve is seen modestly lower and marginally flatter (3y -1.3bps at 2.845, 30y -3.0bps at 3.012), with focus on today's 12/15-year Bund auction, with E750mln of the 0% May-35 Bund and E1.25bln of the on-the-run 15-year 1.00% May-38 Bund due.
  • Germany's IFO data for October is due at 0900BST/0400ET, with markets expecting the expectations component to improve marginally to 83.5 from 82.9. Little market react is expected given the proximity to tomorrow's ECB meeting, for which the full MNI Preview is here: https://roar-assets-auto.rbl.ms/files/56338/ECB%20...

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