Major Curves Bear Steepen A Little

Bund futures have faded from best levels, last -35, while wider German cash trade sees 1.5-2.5bp of cheapening as the curve bear steepens at the margin (U.S. Tsy steepening overnight would have helped).

• A recovery from session lows in Euro STOXX 50 & e-mini futures provide the only real points of note (the former is now firmer on the day), outside of the flow-driven bid in bonds seen just after the cash equity open.
• Most of the core/semi-core EGB curves have seen similar degrees of steepening, meaning spreads vs. German 10s are little changed.
• Dutch paper has seen little/no tangible reaction to PM Rutte stepping away from politics after his government broke down on Friday (see more on that from our political risk team here)
• Peripherals are little changed to wider vs. Bunds, with ~4bp of widening in GGBs marking the most pronounced move, while BTPs are ~1bp wider. That is aided by ECB-dated OIS, which is little changed to a touch higher and the general outright cheapening theme, coming after the well-documented tightening in those carry plays.
• ECB speak from the weekend wasn’t market moving, with eyes on comments from GC members Nagel & Herodotou later today.