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EGBS: Under Pressure, Spreads Wider

EGBS
BulletEurozoneFixed Income BulletsMarkets

Core global FI markets remain under pressure.

  • Bearish technicals and rallying energy prices weigh early this week.
  • Bund futures as low as 130.57 before a recovery to 130.70.
  • German yields 2-3bp higher, 5s lead the move.
  • 10s near their July high (2.642%), that level equates to 130.50 in futures today.
  • Weakness in core global FI & European equities promotes EGB spread widening
  • BTP/Bunds ~5bp wider at 122.5bp, eying the early December closing high (123.3bp). 3- & 7-Year BTP supply passed smoothly.
  • OATs ~2bp wider vs. Bunds, 85bp caps for now. ’24 cycle closing highs at 88.4bp lie above. Participants eye French PM Bayrou’s inaugural speech to parliament, due Tuesday.
  • GGBs widen by ~4.5p vs. Bunds, unwinding some of their early ’25 outperformance.
  • No real sign of underperformance for 10-Year RAGBs this morning, despite the negative ratings outlook move from Fitch on Friday as Austrian fiscal & political headwinds are well-documented. Spread to Bunds +1bp.
  • Little of note in ECB speak from Lane, Rehn & Vujcic. Vujcic seemingly remains more cautious when it comes to cuts, while Lane & Rehn stuck to the central ECB view.
  • ECB-dated OIS price 88bp of cuts through year-end vs. ~92bp late Friday.
  • Cross-market cues eyed for the remainder of the day, with little of note on the European calendar.
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Core global FI markets remain under pressure.

  • Bearish technicals and rallying energy prices weigh early this week.
  • Bund futures as low as 130.57 before a recovery to 130.70.
  • German yields 2-3bp higher, 5s lead the move.
  • 10s near their July high (2.642%), that level equates to 130.50 in futures today.
  • Weakness in core global FI & European equities promotes EGB spread widening
  • BTP/Bunds ~5bp wider at 122.5bp, eying the early December closing high (123.3bp). 3- & 7-Year BTP supply passed smoothly.
  • OATs ~2bp wider vs. Bunds, 85bp caps for now. ’24 cycle closing highs at 88.4bp lie above. Participants eye French PM Bayrou’s inaugural speech to parliament, due Tuesday.
  • GGBs widen by ~4.5p vs. Bunds, unwinding some of their early ’25 outperformance.
  • No real sign of underperformance for 10-Year RAGBs this morning, despite the negative ratings outlook move from Fitch on Friday as Austrian fiscal & political headwinds are well-documented. Spread to Bunds +1bp.
  • Little of note in ECB speak from Lane, Rehn & Vujcic. Vujcic seemingly remains more cautious when it comes to cuts, while Lane & Rehn stuck to the central ECB view.
  • ECB-dated OIS price 88bp of cuts through year-end vs. ~92bp late Friday.
  • Cross-market cues eyed for the remainder of the day, with little of note on the European calendar.