Commerzbank note that “the remuneration of sovereign deposits in the Eurosystem will be reduced to a maximum of €STR-20bp as of today. The Bundesbank has decided to remunerate deposits at the ECB cap of €STR-20bp from 1 May, but had previously been paying 10bp less than the ECB ceiling and will "examine in due course whether a further reduction is appropriate".”

• “This has triggered speculation about changes in the DFA repo behaviour and that specials would either have to richen again or could become scarce on lower DFA lending as a consequence.”
• “The latest richening of our key specialness metric (spread of 10 richest ISINs vs GC and €STR) to €STR-30bp fits the picture. Combined with shaky risk sentiment we therefore reiterate widening risks for Schatz-spreads.”