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Remain Firmer In Spite Of Easing Geopolitical Angst

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Core/semi-core EGBs remain firmer this morning, amid a modest pullback in market-based Euro inflation expectations (e.g. 5y5y inflation swaps) - in part due to softening energy prices.

  • That dynamic has outweighed any pullback in safe haven demand that would be implied by reports that Israel will delay retaliation on Iran until after the Passover period.
  • Bono/Obli and MT OAT supply was well digested, with a French linker auction due later this morning.
  • Bunds are +17 at 131.62, but remain well short of last Friday’s highs. This week’s move lower reinforces current bearish technical conditions.
  • The German and French cash curves have lightly bull flattened, while 10-year periphery spreads to Bunds are tighter (likely a function of easing geopolitical tensions).
  • ECB Vice President Guindos re-iterated the Central Bank’s guidance re dialling back policy restriction, while comments from Nagel, Centeno, Simkus and Vujcic are still scheduled for today,
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Core/semi-core EGBs remain firmer this morning, amid a modest pullback in market-based Euro inflation expectations (e.g. 5y5y inflation swaps) - in part due to softening energy prices.

  • That dynamic has outweighed any pullback in safe haven demand that would be implied by reports that Israel will delay retaliation on Iran until after the Passover period.
  • Bono/Obli and MT OAT supply was well digested, with a French linker auction due later this morning.
  • Bunds are +17 at 131.62, but remain well short of last Friday’s highs. This week’s move lower reinforces current bearish technical conditions.
  • The German and French cash curves have lightly bull flattened, while 10-year periphery spreads to Bunds are tighter (likely a function of easing geopolitical tensions).
  • ECB Vice President Guindos re-iterated the Central Bank’s guidance re dialling back policy restriction, while comments from Nagel, Centeno, Simkus and Vujcic are still scheduled for today,