ECB: Hawkish Shifts In Analyst ECB Calls But Median Still Eyes 1.75% Terminal

SX5E (18th July vs 15th Aug) 5250c, bought the Aug for 32 in 5k (suggest rolling Call).

Outperformance in the long end of the German swap curve (30s) with yesterday’s sell off in 30-Year spreads now completely reversed (both in conventional swap spreads and ASWs), as the impact of the DFA’s Q3 funding plan and accompanying commentary is unwound (some of the bearish details initially caught some off guard).

• Note that long end spread widening remains evident even as 30-Year yields move off session lows.
• 10-Year Bund yields failed to break below 2.50% during this morning’s rally.
• Commerzbank recommend using any relief rally “in Bunds as a selling opportunity today as supply prospects sink in”.
• Further out, they note that “given the revised Q3 calendar and our expectation for the Q4 adjustment, we now expect record gross Bund issuance of EUR293bln (from EUR265bln at the beginning of the year), which corresponds to a net issuance volume of EUR110bln”.