POWER: CCCEU Rejects Claims of Chinese Threat in 270MW German Wind Project

SX7E (21st Feb) 163/157ps, bought for 1.65 in 6k vs 1.5k at 163.00.

OEH5 117/118/118.50 broken c fly sold at 51 in 1k.

Bund futures have pierced Monday’s high, currently +47 ticks at 133.59. Regional data/speakers have not been market moving, with major EGB futures following USTs higher through the session. 

• Today’s rally in Bunds exposes 133.73 (50.0% retracement of the Dec 2 - Jan 14 bear leg) and 133.86 (Jan 2 high) on the upside.
• The German curve has bull flattened, with 30-year yields ~4.5bps lower today.
• 10-year EGB spreads are within 0.5bps of yesterday’s closing levels. French PM Bayrou is expected to survive two censure motions later this afternoon.
• Eurozone January services/composite PMIs were broadly in line with flash prints, while December PPI was close to consensus.
• The ECB wage tracker was little changed compared to the December release, still pointing to a deceleration of wage growth this year.
• ECB Vice President de Guindos played down the role of the neutral rate in setting near-term policy an interview. This comes ahead of an ECB staff report on the concept on Friday.
• Global focus turns to the US Quarterly Refunding Announcement at 1330GMT/1430CET, with US services sentiment data also due this afternoon.