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One eye on the Fed today

BUNDS
  • Very light volume at the start of the Bund cash open, traded around 10k in the first 30 minutes, mostly buyers which has helped exacerbate the move to yesterday's high at 169.36, printed 169.38.
  • German 5s/30s is leaning flatter on the cash open, but trend since last Friday has been the steepening of the curve, by 15.33bps.
  • Focus today on the data front will be on ISM services. Durable good is final reading, while US ADP has no real proven correlation with NFP and the NFP isn't an "all eyes" this week, with short term focus squarely on inflationary risk.
  • Speaking of inflation, and this has been the main short term concerns for investors and market participants, the energy prices.
  • We have OPEC meeting tomorrow, which could be interesting, given Biden's latest comment blaming the Cartel for inflationary pressures.
  • SUPPLIES: UK £2.5bn 2029 (Equates to 17.7k Gilts), and German EU4bn Bobl (equates to 31.4k Bobl).
  • SPEAKERS: Fed Powell will be at the forefront. ECB Lagarde, Muller, Elderson, de Cos, Villeroy, and BoE Bailey

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