Mixed Price Action Though Bunds Trade Within Yesterday's Range

EGBs see mixed price action early Wednesday, though Bund futures trade within yesterday's range.

• Global core FI was pressured by a weak BoJ Rinban operation and Israeli cabinet approval of an Israel/Hamas hostage deal overnight, before Bund/OAT futures found support as European desks filtered in (potentially on the back of German fiscal headlines r.e. reinstating the 2024 debt brake late Tuesday and expectations for lower Gilt issuance in the UK Autumn Statement later today).
• An additional bout of weakness came following hawkish comments from RBA Governor Bullock and financial stability concerns from today's ECB review, before price action reversed.
• The short-term tone in Bund futures remains firm, though a break of the Nov 7/13 low of 129.35 would highlight a possible reversal. Today's 15Y supply represents 13.7k Bund equivalent, so is not expected to weigh significantly. Core/semi-core yields are -1bps lower to +2bps higher at typing.
• Periphery spreads to Bunds are marginally tighter this morning. BTPs came under some pressure following headlines from the ECB's Financial Stability Review and ahead of today's exchange auction, but are off intraday lows.
• Today's local docket is light, with ECB's Centeno (presenting Portugal's Financial Stability Report) and Nagel (panel at Osservatorio Permanente Giovani-Editori) not expected to be market movers. Flash Eurozone consumer confidence at 1500GMT provides the data highlight.