Most Paper Tightens to Bunds

Nothing in the way of surprises for BTPs stemming from the ’24 Italian issuance plan covered earlier, with 10s tightening by 3.5bp on the day vs. Bunds. The lack of meaningful upward movement in ’24 issuance, coupled with the recovery from session lows and subsequent move higher in the likes of e-minis and European equity futures, along with CDX compression, allow BTPs to compress.

• 10-Year BTP yields move less than 5bp away from 3.50%, falling the best part of 5bp on the day.
• Bund futures are a little shy of session bests and bulls haven’t manage to force a test of yesterday’s highs.
• German benchmark yields are 4.5bp lower to 1bp higher, with twist steepening apparent on the curve.
• EGB spreads to Bunds are generally tighter on the day.
• 10-Year Finnish paper is an exception after the Finnish ’24 financing update.
• 10-Year GGBs match BTPs, with nothing in the way of notable headwinds stemming from the ’24 Greek funding plan, also released today.
• A quick reminder that ECB Executive Board Member Schnabel stressed that there is still some way to go re: the fight against inflation, earlier today.
• The EGB space was fairly resilient re: spill over from U.S. Tsys surrounding firmer than expected durable goods data