Recovery From Cheaps Loses Steam

Bund futures -5, while the German cash benchmarks are little changed across the curve.

• The move away from session cheaps in Bunds stalls, alongside a similar situation in U.S. Tsys.
• Overt headline drivers outside of Chinese matters remain somewhat limited on the day.
• Global equity futures are off session highs, along with oil and bonds, as recoveries from session lows fade.
• EUR 5y5y futures trade back towards cycle highs after retaking 2.60% on Thursday.
• Not one to move the longer end, today’s 6-month Bubill sale had a very low bid-to-cover. The Buba cover was the lowest since Jul 2021 per BBG records and basically around the lowest in the series. No particular explanation was evident but this stands in stark contrast to the strong 9-month auction seen last week after the Bundesbank's move to stop remunerating gov't deposits.
• Ultimately, ranges remain tight with participation subdued. Proximity to Tuesday’s Assumption Day holiday is probably a limiting factor.