EGBS: 2.70% Figure Is Containing Upside In 10-year Bund Yields For Now
10-year Bund yields remain below the 2.70% figure that contained upside yesterday. A move back towards the 2.80% seen in early September may require increased conviction that the ECB’s easing cycle has concluded, alongside durable signs that the ramp-up in German fiscal spending and associated issuance is underway heading into 2026.
- The German curve has lightly bear steepened today, with 5s30s up 0.5bps to 99.6bps. 5s30s has struggled to consolidated above the 100bp figure over the last two months. EUR swap rates are little changed on the session. The multi-week move higher in EUR 10-Year swap rates (from a low of 2.525% to a high of 2.715%) seems to have stalled.
- Bund futures are -10 ticks at 129.03 amid fairly light cumulative volumes of under 200k. Spillover from this morning's UK labour market data was worth about 10 ticks of upside in Bunds. A short-term bear cycle remains intact, with support seen at 128.80 (yesterday's low) and 128.70 (Oct 10 low).
- European equity futures are up 0.4%, which sees 10-year EGB spreads to Bunds marginally narrower on the session.
- The Netherlands sold E2.41bln of the 2.50% Jul-35 DSL this morning.
- There’s been a flurry of ECB speak from Elderson, Sleijpen, Kocher and Vujcic today. None have been particularly noteworthy. The bar to the median Governing Council supporting another cut is increasing, particularly after stronger-than-expected growth signals in recent weeks.
- The November ZEW survey was weaker-than-expected (expectations component 38.5 vs 41.0 cons, 39.3 prior), but had no market impact. It is a survey of investors so often exhibits corelations with stock market movements.
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US: Trump Oval Office Announcement Underway Shortly
US President Donald Trump is shortly due to deliver an announcement in the White House Oval Office. LIVESTREAM The announcement is expected to relate to drug pricing and could follow a similar template to a recent pledge from Pfizer.
- The announcement will be Trump's first press remarks since a market-moving Truth Social statement earlier today in which Trump suggested calling off a meeting with Chinese President Xi Jinping and raising tariffs on China in response to new export controls from Beijing on rare earths. See earlier bullets here and here.
RATINGS: Moody's Completes Periodic Review Of Belgium, No Rating Action
No ratings actions for Belgium from Moody's, which is quoted in a press release on Bloomberg: "Moody's Ratings (Moody's) has completed a periodic review of the ratings of Belgium and other ratings that are associated with this issuer. The review was conducted through a rating committee held on 2 October 2025 in which we reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), and recent developments. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future."
- There had been some speculation there could be a ratings action - MNI wrote Thursday: "* Moody's on Belgium (Current rating Aa3, Outlook Negative): We expect Moody's to maintain their current stance in the absence of 2026 budget details."
MACRO ANALYSIS: US Macro Week Ahead: No CPI, But Plenty Of Pre-Blackout FedSpeak
Below is the week’s data schedule, with MNI’s annotation of whether or not data will be postponed.
- As we went to press, the Fed announced that next week's Industrial Production data will be postponed (was due to be published next Friday Oct 17) as the data “incorporate a range of data from other government agencies, the publication of which has been delayed as a result of the federal government shutdown.”
- We won’t be getting September CPI as scheduled on Oct 15, but at least the BLS announced it will publish the data on Oct 24.
- As such next week we’ll be looking at some under-covered data points, including the Redbook weekly and Chicago Fed’s CARTS retail sales data (in lieu of the Census Bureau retail sales report), with a little more focus than usual on regional Fed manufacturing indices (NY, Philadelphia).
- Once again, the dearth of tier-one data leaves Fed commentary in focus ahead of the pre-FOMC blackout period: highlights for us are Philadelphia Fed President Paulson making her first comments on monetary policy on Monday since being appointed in the summer, while as always Chair Powell bears watching on Tuesday (we also hear from Bowman, Waller, Collins, Miran, Schmid, and Musalem).
- Additionally we get the latest Beige Book which was already key given the FOMC was already increasingly focused on anecdotal information as it attempts to navigate murky economic waters.
