EGBS: Mixed Germany / EZ PMIs Temper France-induced Dovish Reaction
The dovish reaction to the weaker-than-expected French services PMI was tempered by a better-than-expected German manufacturing print. That leaves Bund futures at 131.98, +38 ticks on the session but off the 132.20 high. Initial resistance in Bunds at 132.26 remains intact, shielding the 20-day EMA at 132.59. Wednesday’s low at 131.26 provides support.
- The Eurozone-wide PMI suggested the growth prospects in the region continue to appear stagnant, while a renewed uptick in output charges will keep inflation concerns at the forefront of hawkish ECB policymaker's minds.
- German yields are 3.0 to 3.5bps lower, with the curve flattening slightly.
- 10-year EGB spreads to Bunds are generally biased wider, with the exception of BTPs and GGBs. The OAT/Bund spread is 1.5bps wider at 74bps following the weak French PMI.
- Ongoing political and fiscal uncertainty in Austria heightens the risk of a negative outlook move from Moody’s after the close.
- ECB-dated OIS price 77bps of easing through year-end, up from 74bps this morning. ECBspeak is scheduled from the dovish Centeno (1030GMT) and Chief Economist Lane (1430GMT).
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
SLOVAKIA: Opposition Cries Foul, Vows To Table Another No-Confidence Motion
Slovak opposition withdrew a no-confidence motion against PM Robert Fico's cabinet from parliament after the government fought back, with the premier accusing his rivals planning a "coup" against legally elected officials. However, opposition lawmakers are reportedly preparing to repeat their attempt to unseat the government soon.
- Yesterday's debate in parliament took place behind closed doors after Fico said he would be citing classified information from a report provided by the Slovak Intelligence Service (SIS).
- Denik N reported that President Peter Pellegrini was due to visit SIS headquarters this morning to discuss the classified report but there would be no update for the media.
- The main opposition Progressive Slovakia (PS) party said it would request convening an extraordinary oversight committee to investigate an alleged misuse of the SIS by the government.
- Furthermore, PS leader Michal Simecka announced that the opposition will make another attempt to call a special meeting of parliament and table a no-confidence motion against the government.
EGB SYNDICATION: Spain 10-year Obli: Spread set
- Spread set at 3.45% Oct-34 Obli (mid) +5bp
- Guidance was +8bp area then revised to +6bp area (+/1bp WPIR)
- Size: EUR benchmark (MNI expects E10-15bln)
- Books in excess of E155bln
- Maturity: 30 April 2035
- Coupon: Short first
- ISIN: ES0000012O67
- Settlement: 29 January 2025 (T+5)
- Bookrunners: BBVA, CACIB, DB (B&D/DM), JPM, MS, SANTANDER
- Timing: Books to close at 10:40GMT / 11:40CET
From market source
EUR: FX Exchange traded Option trades for more
FX Exchange traded Option, this looks to be a new position, it covers the next Fed, BoE and ECB.
- EURUSD (7th Feb) 1.0200p, sold today at 0.00090 in ~3.16k.
This was also sold Yesterday at 0.0102 in 2.35k.
