Remaining Underpinned

EGBs also continue to rally, with Bund, BTP and OAT futures all registering fresh session highs in recent trade, before edging back from best levels.

• The 5- to 10-Year zone of most curves continues to lead the bid.
• A supply outage-driven rally in TTF futures, swelling EUR IG issuance slate and 30-Year green German syndication announcement have done little to counter the rally.
• Meanwhile, a downtick in crude oil futures may be helping, building on the bond-supportive factors flagged this morning.
• Peripherals are little changed to a touch tighter on the day.
• OATs continue to look through Friday’s negative French ratings action from S&P, with spreads to Bunds little changed (we covered that development in detail earlier).
• Meanwhile, IRISH paper has looked through Friday’s positive Irish ratings action from Fitch (in spread terms). The best guess we have here is that the positive Irish fiscal dynamics and related ratings upgrade were already discounted given plenty of coverage and progress on that front in recent years. Indeed, IRISH spread compression trades have been a sell-side favourite in early ’24.