What to watch

Today sees a fairly light calendar with two of the main events of the day already passed us: a published interview with ECB's Lane and German factory orders. The other event to look for will be US trade later today.

• Lane sounded as though he was more likely to vote for a 50bp hike than 75bp in his interview published around 90 minutes ago. He made the point that the starting point is different now that the ECB has already hiked 200bp. Markets price in 53bp for the December ECB meeting, so will not be surprised by his comments.
• German factory orders were stronger than expected in October, with an upward revision to September. These data have helped push Bund futures around 20 ticks lower, through yesterday's low to the lowest level since 30 November.
• In terms of supply this morning we have a German Schatz auction, 4E27 and 1E39 gilt auctions and expect the announcement of the EU syndication mandate. We also have bill auctions from Belgium and the ESM.
• This afternoon's BOE Financial Stability Portfolio sales will only see linkers on offer due to the DMO's long-dated conventional gilt auction.