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Spreads Tighter, No Clear Driver

EGBS
HomepageBond Market NewsBulletMarketsFixed Income Bullets

Hard to identify a driver for the recent tightening in EGB/Bund spreads, with equities still comfortably lower on the day.

  • Spreads now flat to 1.5bp tighter on the day after being 0.5-2.0bp wider earlier.
  • Pullback from highs in Tsys (alongside another flurry of $IG issuance announcements) seems to be weighing more on Bunds than EGB peers at this juncture, but the start of the tightening in EGB spreads pre-dated that.
  • Fiscal headlines surrounding EV subsidies and the German state reducing its stake in Commerzbank aren’t seen as new news/meaningful for the bottom line of the German fiscal balance.
  • No obvious headlines catalyst elsewhere either.
  • EUR 3m10y vol still little changed on the day, back from intraday high.
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Hard to identify a driver for the recent tightening in EGB/Bund spreads, with equities still comfortably lower on the day.

  • Spreads now flat to 1.5bp tighter on the day after being 0.5-2.0bp wider earlier.
  • Pullback from highs in Tsys (alongside another flurry of $IG issuance announcements) seems to be weighing more on Bunds than EGB peers at this juncture, but the start of the tightening in EGB spreads pre-dated that.
  • Fiscal headlines surrounding EV subsidies and the German state reducing its stake in Commerzbank aren’t seen as new news/meaningful for the bottom line of the German fiscal balance.
  • No obvious headlines catalyst elsewhere either.
  • EUR 3m10y vol still little changed on the day, back from intraday high.