EUROZONE ISSUANCE: EU Sends RfP For Upcoming Issue

Bund futures push through the day's highs on US Pres Trump's announcement that 25% tariffs would be imposed on EU imports.

• RXH5 touches 132.89, up 41 ticks on the day - the level to watch is 132.97, the Feb 13 high and a key near-term resistance, clearance through which our tech analyst notes would signal a reversal. 

• US TSY 7Y AUCTION: NON-COMP BIDS $85 MLN FROM $44.000 BLN TOTAL

European curves traded slightly flatter Wednesday, with short-ends underperforming, and periphery / semi-core EGBs outperforming.

• An early bid in core FI alongside weaker equities, a further fall in gas prices and and a stronger US dollar faded over the course of the session as the latter recovered. The Bund rally continued after the cash close in futures as US President Trump announced 25% tariffs would be imposed on EU products.
• Data was scant either side of the Atlantic: German GfK consumer confidence fell to the lowest since April, while the IFO employment barometer suggested that job cuts continue.
• BOE's Dhingra noted that higher US tariffs on UK imports are unlikely to greatly impact UK inflation.
• Bunds outperformed Gilts across most of the respective curves, with twist flattening in both.
• Periphery EGB spreads tightened into the cash close as equities rallied. In semi-core, OATs outperformed, finishing close to the 2025 low of 70.8bp.
• The February Eurozone flash inflation round starts Thursday with Spain - MNI's preview of the round is here. We also get various Eurozone confidence indicators and the accounts of the January ECB meeting. 

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is up 0.3bps at 2.068%, 5-Yr is down 1.9bps at 2.196%, 10-Yr is down 2.5bps at 2.433%, and 30-Yr is down 2.7bps at 2.696%.
• UK: The 2-Yr yield is up 0.1bps at 4.175%, 5-Yr is unchanged at 4.182%, 10-Yr is down 0.7bps at 4.502%, and 30-Yr is down 0.8bps at 5.094%.
• Italian BTP spread down 1.8bps at 111.2bps / French OAT down 2.2bps at 71.7bps