EU CREDIT UPDATE: New Issue Performance

10-year Bund yields have moved away from session lows. Now little changed on the session at 2.86%, Bunds remain within the 2.80-2.90% range that has broadly contained price action since early December. Headline flow and spillover from JGBs and USTs have dominated intraday moves over the past week, but regional drivers such as progress on  Germany’s fiscal expansion remain key to monitor over the next few weeks/months.

• The curve has lightly twist steepened, with 30-year yields up 2bps to 3.50%. This likely reflects pre-positioning ahead of today's long-end Bund supply (at 1030GMT). Austria, Finland and Cyprus are also holding syndications today. The December 22 high at 3.556% presents the initial topside target  in 30-year Bunds.
• Bund futures are +1 at 127.98, off earlier highs of 128.25. Volumes are healthy, albeit lower than yesterday’s extremely active session. This week’s range (127.64 / 128.58) presents initial technical levels to monitor.
• 10-year EGB spreads to Bunds are biased marginally narrower on the session.
• This morning, commentary from ECB’s Nagel and Lagarde was marginally dovish, but didn't suggest a shift in policy stance is imminent for now. 

• Size: E3bln (MNI expected E3bln, with risks of E4bln)
• Books closed in excess of E25bln (inc E750mln JLM  interest)
• Spread set: MS+47bp (guidance was MS+50bp area)
• Maturity: 15 April 2041
• Coupon: Short first
• ISIN: FI4000598776
• Settlement:  28 January 2026 (T+5)
• Bookrunners: Barclays, BNPP, Danske, DB (B&D), JPM
• Timing: Allocations and pricing to follow

From Bloomberg/ MNI colour

• USD weakness this week is mostly consolidating as markets remain cautious on any escalation regarding Greenland, awaiting any moves in the balance of power against the European bloc. This keeps risk sentiment subdued, and precious metals very well supported, regardless of an overnight paring from yesterday's spike in JGB yields.
• NZD continues its impressive performance this week, matching the 0.5853 December highs overnight, and a break above would mean the highest levels since September for the Kiwi, opening 0.5914. The breadth of the renewed dollar selling has also steadily underpinned a three-day rally for AUDUSD, with the pair grinding above 0.6750 and looking set for a retest of the cycle highs and technical bull trigger at 0.6767.
• A more stable dollar backdrop has seen USDCHF supported early Wednesday, respecting the December 0.7862 lows for now, and rising back to 0.7920. SNB President Schlegel mentioned this morning that negative Swiss inflation remains possible also this year in single months but would not pose a problem for the Bank.
• UK CPI was probably close enough to analyst and BOE expectations to have limited impact on the February MPC decision and pricing. GBPUSD is a touch softer on the session, but its today’s GBPAUD decline that is catching the eye, with the cross extending its technical break of 1.9950 this week to near 11-month lows. Bearish momentum signals greater scope for a move towards 1.9594, the 2025 low.
• Focus is on the WEF summit in Davos where key speakers incl. Trump and Rutte are scheduled. US pending home sales highlights a light data calendar, where tomorrow’s US PCE and third reading of GDP will cross.