German FI little moved overnight; Schatz.......>

EGBS: German FI little moved overnight; Schatz unch., Bobls +4.0, Bunds +11.

- The initial ECB decision/statement put a bid into EGBs as the Bank held off on

rate cuts but signalled that such a move is in the pipeline as it introduced "or

lower" to its forward guidance re: rates. Interestingly, there was also tweaks

to the language surrounding inflation (some notable ECB watchers have deemed

this the "whatever it takes" moment for inflation). The ECB also opened up the

possibilities of a broad based package of monetary easing. Draghi held off on

the details re: potential easing matters during his presser & highlighted that

recessionary risks are low, even with the outlook getting "worse & worse."

- The presser didn't meet the high threshold set by doves, with stronger than

exp. U.S. durable goods data also helping to pressure bonds. ECB source reports

tempered the sell off later in the day, alluding to a higher likelihood of a

rate cut in September (which many already expected), while pointing to some

disagreements within the Gov. council surrounding the other easing options.

- Elsewhere the Spanish political situation remains in limbo.

- The ECB's survey of f'casters is due today, as is Italian BTPEi & CTZ supply.