MNI Europe Pi: EGB Long-Setting Into ECB

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EXECUTIVE SUMMARY

Long-setting has been the theme going into Thursday's ECB decision, at least for EGBs over the past week (with Gilts bucking the trend).

• This leaves European bond futures positioning mixed, with three contracts structurally short, two flat, and two long/very long.
• These are mostly unchanged since our last update on July 7.
• GERMANY: German contracts' structural positioning has remained fairly steady since our latest update. Schatz remains in "long", and on the cusp of "very long" territory. Bund has reverted to short from "very short" previously. Buxl remains "short", with Bobl staying flat. Longs were set across all four contracts last week.
• OAT: OAT remains in flat territory (having flirted with longs in June). The most recent week's trade was indicative of long setting.
• GILT: Gilt structural positioning remains in short territory. In contrast to other European contracts, shorts were set in the last week.   
• BTP:  BTP continues to extend further into "very long" territory. Trade indicative of long-setting was seen in the most recent week.