NATO: 2nd Patriot System Deployed To Turkey Amid Threat Of Missile Attack (2/2)

• 10-year Bund yields are now 1bp higher on the session at 2.765%. Focus through this week will on whether yields test trendline support drawn from the August 2022 low, currently at ~2.71%. We have noted in recent weeks that Bund yields face several cross-currents this year, with fiscal/issuance considerations applying upside pressure but geopolitical uncertainty and solid AAA-rated sovereign demand working to the downside.
• The German curve trades flatter this morning with 2s10s -0.6bps at 71bps, a multi-week low. 10s30s is also a little flatter, just off last week’s fresh multi-year high of 68.5bps.
• A reminder that comments Finance Minister Klingbeil generated some brief, contained upside pressure in Bund yields late Friday. A headline suggested Germany was considering exempting the raw materials fund from the debt brake (by classifying it as military spending). However, market impact was limited because (i) Klingbeil was very non-committal in the comments and (ii) the existing raw materials fund under KFW is only E1bln in size.
• Bund futures are -15 ticks at 129.08. A bull mode remains intact and the contract is holding on to the bulk of its latest gains. Initial firm support to watch lies at 128.26, the 50-day EMA.
• 10-year EGBS spreads to Bunds are marginally narrower owing to a recovery in global equity futures. Today’s EGB supply is coming from Slovenia and Slovakia.
• The remainder of today’s calendar is light, given the US public holiday.

Figure 1: 10-year Bund yields since 2025 (Source: Bloomberg Finance L.P)

• Guidance revised to MS+37bp area (from MS+40bp area)
• Books in excess of E5bln (inc E575mln JLM interest)
• Settlement: 23 February, 2026 (T+5)
• Bookrunners: BNP PARIBAS (B&D), Deutsche Bank, Erste Group, J.P. Morgan
• Timing: Books open, today's business

Source: Market source / MNI colour

Looking ahead to this Week, Traders will start Rolling/Closing their March Positions in Treasuries and UK Gilt into June.

Some Desks might look to roll some ahead of Friday's Data, although expect for the Roll Pace to be fully active as of next Monday.

First Notice for Gilt is the 26th and 27th for Treasuries, roll pace is running at:

• WNA: 2%.
• USA: 2%.
• UXY: 1%.
• TYA: 3%.
• FVA: 3%.
• TUA: 2%.
• Gilt: 1%.