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Marginally Dovish Reaction To ECB Accounts, Moves Limited


Incremental fresh session highs for Bund futures alongside the release of the accounts covering the ECB’s most recent monetary policy meeting.

  • Some focus on the likely downward adjustment to the bank’s inflation forecast track and some attention on the initial discussions surrounding the preference for no rate hike at the meeting, although general market expectations/knowledge limit the follow through.
  • The Bank’s data-dependent stance was also underscored.
  • Bund futures off best levels to last trade +50, while German cash benchmarks sit 2.5-7.0bp richer as the bull steepening theme holds.
  • Core/semi-core curves still see similar moves. Spreads vs. Bunds little changed.
  • Peripherals are little changed to a touch tighter vs. Bunds.
  • ECB-dated OIS sit ~1bp softer than pre-release levels.
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