Sovereign Supply Slate Likely Factoring In To Weakness, Curves Flatten

It is also worth noting the impending rounds of French & Spanish bond supply that we flagged earlier may be adding to the flow-driven weakness in EGBs, while some softening in Euribor futures and modest pay-side flows in ECB-dated OIS will be aiding cheapening in the front end of the bond curves. Bund futures hover a little above worst levels, -25 or so, while the German cash curve sees the major benchmarks running little changed to 2bp cheaper as the curve bear flattens. The remainder of the core/semi-core curves have also flattened, although there has been a slightly more pronounced twist flattening impulse on some of those curves. Most of the peripheral curves have flattened (with Greece providing the major exception). 10-Year spreads vs. Bunds are little changed to a touch wider on the day.