Non-committal Nagel Lends Support

Bund futures tick further away from session lows in recent trade, seemingly aided by Bundesbank chief Nagel remaining non-committal and stressing data-dependence when it comes to the ECB’s September decision (he sits on the hawkish side of the hawk-dove spectrum at the ECB).

• The contract was already nudging higher ahead of the comments and last trades +5 on the day.
• German cash benchmarks run 2bp cheaper to 1bp richer as the curve pivots around 5s, twist flattening.
• Most other EGBs curves see similar moves.
• Nagel’s comments seemingly help peripherals to compress further vs. Bunds at the margin, while core/semi-core spreads are still little changed vs. Bunds.
• A move higher for global equity index futures will also be aiding the compression.