Initial Support Breached As Fed Weighs

Bund futures have looked through initial technical support at 129.30 post--Fed, although the move was shallow and the level has been retaken to the upside, with the contract -50 last.

• Session lows (129.23) and the round number (129.00) now provide the initial reference points to the downside, with yesterday’s gains unwound.
• In the opposite direction, and further away, key short-term resistance has been defined at 131.49, the Sep 14 high.
• A re-airing of Wednesday comments from ECB Governing Council member Makhlouf has been seen this morning.
• While the Eurozone data docket is relatively limited today, eyes will be on central bank decisions from the UK (seen as a much closer call after yesterday’s CPI data), Norway, Sweden & Switzerland. The Scandinavian and Swiss central banks are expected to deliver 25bp rate hikes, so focus should fall on guidance re: further policy action.
• Comments from ECB’s Schnabel, Lane and Nagel will also cross (Lane is due after market close).
• On the issuance front, Spain looks to sell a combined E5.5-6.5bln across the 2.80% May-26 Bono (ISIN: ES0000012L29), the 0% Jan-28 Obli (ISIN: ES0000012I08) and the 0.50% Oct-31 Obli (ISIN: ES0000012I32). France will then look to sell a combined E10-11bln across the on-the-run 3-year 2.50% Sep-26 OAT (ISIN: FR001400FYQ4), the 0.75% May-28 OAT (ISIN: FR0013286192) and the on-the-run 5-year 2.75% Feb-29 OAT (ISIN: FR001400HI98).