Moving higher in early European trading

Bunds have moved higher in early European trading this morning as focus switches back towards sanctions on Russia despite European equity futures generally a little higher on the day.

• Peripheral spreads are generally wider, led by BTP-Bund spreads which are around 2.7bp wider for 10-year this morning.
• It's a pretty light calendar to start with the week with speeches on Wednesday from de Guindos at the European Financial Integration and Stability conference and Lane in a panel on inflation dynamics likely the highlights of the week. These are likely to be the last meaningful comments ahead of next week's ECB meeting.
• Markets continue to price in more than 50bp for this year (54bp by the December meeting) but September is not fully priced for a 25bp hike any more (24bp priced now).
• Our technical analyst notes that short-term gains in Bunds remain corrective and that a resumption of weakness would open 156.00. Firm resistance is at 160.31, the Mar 23 high. We currently trade up 0.37 today at 158.72 with 10y Bund yields down -0.7bp at 0.546% and Schatz yields down -0.6bp at -0.82%.