HUNGARY: Chief of Staff Says 2026 Budget Target Being Reviewed

Bund futures are -10 ticks at 131.53, softening a touch as global equity futures continue to recover from yesterday’s lows. The improved risk backdrop sees BTP and OAT futures outperform Bunds.

• A corrective bull cycle remains in play in Bunds, with initial resistance still the 20-day EMA at 132.10.
• The German cash curve has lightly bear flattened. The new 2.20% Mar-27 Schatz was launched this morning, and digested smoothly.
• The ECB’s Q4 Bank Lending Survey signalled a tightening of credit standards and a lower demand balance amongst firms than seen in Q3.
• Austria is launching a new 10-year RAGB and tapping a 2049 Green RAGB via syndication today.
• Alongside Germany, the Netherlands and Italy also held conventional auctions this morning.
• The OAT/Bund spread is back below 73bps, with fiscal/political headline flow set to become more prominent again in the coming days/weeks.
• The remainder of today’s regional data calendar is light, leaving focus on any US tariff-related headline flow and the upcoming run of DM central banks later this week. 

• In the equity space, the S&P E-Minis contract initially traded lower Monday extending the pullback from last Friday’s high. Key short-term support to watch lies at 5961.75, the Jan 16 low (pierced). For now, the move down appears corrective, however, a clear breach of 5961.75 would strengthen a bearish threat and signal scope for a deeper retracement, towards 5943.94, 61.8% retracement of the Jan 13 - 24 bull leg. Key resistance is 6178.75, the Dec 6 ‘24 high.
• A bull cycle in the EUROSTOXX 50 futures contract remains intact and the move lower from last Friday’s high, is considered corrective. A deeper retracement would allow an overbought trend condition to unwind. Moving average studies remain in a bull-mode set-up highlighting a dominant uptrend. The first important support to watch is 5097.39, the 20-day EMA. A resumption of the uptrend would open 5298.50, the 1.500 projection of the Nov 21 - Dec 9 - 20 price swing.