EGBS: 10-year BTP/Bund Spread Tests 100bps Even As Equities Soften
May-14 09:40
The 10-year BTP/Bund spread briefly printed below the 100bp handle for the first time since September 2021, with recent tightening momentum persisting even as European equities soften on the session.
- Bund futures have traded in a tight 27 tick range today, currently -2 ticks at 129.54. The 50.0% retracement of the Mar 11 - Apr 7 rally at 129.28 contained downside earlier, but a short-term bearish theme remains intact.
- Bund yields are ~1bp lower across the curve. Today’s 30-year Bund auction was digested smoothly.
- Portugal also sold bonds today, while Belgium and Latvia are holding 5-year syndications. The EFSF has sent an RFP for an upcoming transaction, likely early next week.
- German and Spanish April HICP confirmed flash estimates on an annual basis.
- ECB’s Nagel didn’t add too much to the near-term policy debate. Cipollone, Villeroy and Holzmann are scheduled to speak later today.
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EQUITIES: Looking ahead to Option expiries this Week
Apr-14 09:40
Equity Option expiry is on Thursday this Week, in Notional Terms:
US:
- SPX; $1.37T.
- NDX: $43.13bn.
- Amazon: $14.18bn.
- Apple: $16.24bn.
EU:
- SX5E: €134.84bn.
- SX7E: €11.29bn.
- DAX: €30.06bn.
- FTSE: £11.07bn.
OUTLOOK: Price Signal Summary - Corrective Cycle In S&P E-Minis
Apr-14 09:39
- In the equity space, a short-term reversal in S&P E-Minis last week highlights the start of what appears to be a corrective cycle. The trend condition has been oversold following recent weakness and the move higher is allowing this set-up to unwind. Initial resistance to watch is 5524.91, the 20-day EMA. Resistance at the 50-day EMA is at 5737.71. On the downside, key support and the bear trigger has been defined at 4832.00, the Apr 7 low. Initial support to watch is 5098.16, the 61.8% retracement of the Apr 7 - 10 bounce.
- EUROSTOXX 50 futures traded in an extremely volatile manner last week and rallied sharply higher from recent lows. The climb highlights the start of a corrective cycle and if this is correct, marks an unwinding of the recent oversold trend condition. Resistance levels to watch are 5026.21, the 20-day EMA, and 5153.42, the 50-day EMA. Key support and the bear trigger has been defined at 4444.00, the Apr 7 low. Initial support is seen at 4664.00, the Apr 10 low.
GERMAN T-BILL AUCTION RESULTS: 12-month bubills
Apr-14 09:34
| Type | 12-month Bubill |
| Maturity | Apr 15, 2026 |
| Allotted | E2.4945bln |
| Previous | E1.625bln |
| Total sold | E3bln |
| Target | E3bln |
| Avg yield | 1.864% |
| Previous | 2.133% |
| Bid-to-cover | 2.58x |
| Previous | 1.87x |
| Bid-to-offer | 2.14x |
| Previous | 1.01x |
| Previous date | Mar 17, 2025 |
