Ticking Away From Lows Again, GGBs Continue To Outperform Across Most Of Curve

Bund futures only managed an incremental look through their Asia/early London base on the previously covered pullback, before ticking higher.

• Once again the move from lows came alongside similar swings in wider core global FI (seemingly driven by a block buy in U.S. Tsy futures).
• That leaves the contract -35.
• German cash benchmarks run little changed to ~3.5bp cheaper with the early steepening momentum remaining intact. The 2s10s and 5s30s curves remain within recently established ranges.
• Most other EGB curves twist/bear steepen.
• Spreads to Bunds are generally little changed on the day amongst core & semi-core EGBS.
• Meanwhile, GGBs still outperform on the back of DBRS’ rating action on Friday, while the remainder of the periphery is biased a touch wider.
• Outside of Friday’s sovereign ratings action (including S&P revising Portugal’s outlook to positive), the weekend news highlight for peripherals came as local press outlets suggested that Italy could amend the banking windfall tax it recently outlined.
• €IG issuance was brisk once again this morning, while the EU mandated banks for the expected 2030 round of issuance and Ireland confirmed which bonds it will issue in what should be its round of supply for calendar ’23.