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Short-End German Rally On Lagarde Comments

EGBS

Following some comments from ECB Pres Lagarde in her Euro Parl hearing "no need to rush to premature conclusions"; "will look very carefully at March projections"; "no sign inflation measurably above target in medium-term"; 2Y German yields drop to session lows of -0.320%

  • Schatz closed last Thursday (post-ECB), -0.327%, and today's high was -0.218% so a decent intraday reversal despite Lagarde not really saying much new.
  • Bund yields lower but not keeping pace, 2s10s Germany continues to bull steepen: +7.4bp on the day at 52.99bp, steepest since Jan 31.

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