Bund futures are little changed versus yesterday’s settlement levels after drifting away from this morning’s highs. Modest recoveries in crude oil and European equities have weighed alongside a pullback in Euribor futures.

• This week’s gains in Bunds have nonetheless confirmed a resumption of the bull cycle that started on September 2. Bears would need to breach the 20-day EMA at 134.08 to signal scope for a reversal.
• BTPs continue to outperform on the back of the equity performance, helping the 10-year BTP/Bund spread tighten ~2.5bps, now at ~137bps.
• The most noteworthy snippet of today’s ECB speak came from the usually-hawkish Holzmann, who expressed an openness to cut rates once more this year (likely in December).
• S&P and Moody’s are scheduled to review Spain’s sovereign credit rating after hours (Moody’s also review Greece).
• Next week’s regional calendar includes final August HICP, but the Fed decision is set to take centre stage. Markets will also be watchful of spillover potential from the BoE and BoJ decisions.