June 24, 2024 08:23 GMT
IFO-Driven Bid In Bunds Quickly Fades, Spreads Tighter To Start The Week
BUNDS
Bund futures register fresh session highs at 132.72 on the softer-than-expected IFO data (as the loose relationship with the PMIs held) before fading back to 132.55. The contract sticks comfortably within Friday’s range.
- Yields are also back to little changed on the day across the German cash curve.
- EGB spreads to Bunds generally run tighter on the day.
- A lack of meaningful change in the domestic political picture allows OATs to tighten from multi-year closing wides. Le Pen’s RN continues to lead opinion polls. 10-Year OAT/Bund spread in to ~78bp after Friday’s move above 80bp.
- Spill over from OATs and an uptick in equities supports the periphery, with the 10-Year BTP/Bund spread narrowing by ~2.5bp, back to 150bp.
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