BUNDS: Heavy Italian supply and the Data picks up
Feb-27 07:24
- A more contained range for Bund overnight, although it did see a tiny small gap lower, this has already been closed ahead of the Cash open.
- Initial resistance is still at 132.97, held Yesterday after printing a 132.97 high, and we are testing that level now.
- A Clear break through the 133.00 figure would open to 133.73, the 50% retracement of the Dec/Jan sell off, Bund printed a 133.71 high in Jan, and 133.69 high in February.
- US President Trump seemingly gave contradictive comments on Tariffs and DOGE fraud, so no real impact in Cross assets.
- Today the Data picks up somewhat, it includes, Spain prelim CPI, US 2nd readings GDP/Core PCE QoQ, prelim Durable Goods, US IJC, Tokyo CPI, Japan Retail sales/IP.
- ECB's Account is also scheduled.
- SUPPLY: HEAVY Italian supply: UK £3.25bn 15y (Equates to 35.8k Gilt) will weigh, Italy €3.75bn 2030 (Equates to 83.8k short 2yr BTP or 21.1k BTP), €3bn 2035 (Equates to 29.9k BTP) these will weigh into the bidding deadline, the Italian 2033 floating Bond won't impact BTP.
- SPEAKERS: Fed Barkin, Schmid, Barr, Bowman, Hammack, Harker.
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BUNDS: US Tariffs Talks drive cross assets
Jan-28 07:24
- A tighter 10 ticks overnight range session for the German Bund, but the contract did gap lower on report that Trump's Treasury secretary Scott Bessent is backing to Levy a 2.5% Universal tariffs on US imports that would increase on a Month to Month Basis.
- Moves have been far more pronounced in the Dollar.
- Nonetheless, initial support will be at 131.33 (Monday's gap) in Bund, followed by the 131.00 figure.
- The small opening gap was up to 131.61, but this has now been closed on the Cash open.
- Better resistance is still seen at 132.22 and 132.57 initially.
- There's very little on the Data front for today, these start Tomorrow, but really picks up on Thursday/Friday.
- For Today, US prelim durable goods is the notable release.
- SUPPLY: Netherlands €2.5bn 2030 (would equate to 22.5k Bobl) could weigh, UK sells a 2035 linker (won't impact Gilt), Italy €3bn 2027 (equates to 26.5k short 2yr BTP) could weigh, the 2029, 2036 Linkers won't impact BTP.
- US sells $30bn of 2yr FRN (won't Impact Treasuries), sells $44bn of 7yr notes (the main focus for the US).
- SYNDICATION: Austria 10yr and 2049 Green.
- SPEAKERS: ECB Villeroy, Cippolone.
GILT AUCTION PREVIEW: DMO to announce its tender at 7:30GMT
Jan-28 07:23
- The DMO will announce at 7:30GMT whether it will hold a tender on Thursday this week for a potential conventional sub-5 year gilt (and the size of the tender).
- As we noted yesterday, we think that the 0.125% Jan-26 gilt (ISIN: GB00BL68HJ26) is the most likely candidate with a size of GBP1.0-2.0bln probable.
- See our rationale in our bullet yesterday.
NORWAY: Goods Consumption Should Contribute Positively To Q4 GDP
Jan-28 07:17
Norwegian SA retail sales excluding motor vehicles fell 0.1% in December, while November’s reading was revised up a tenth to 0.4%. On a 3m/3m basis, sales grew 0.5% for the second consecutive month, and rose 0.7% Y/Y (vs 0.2% prior). Similar dynamics were observed in retail sales excluding motor vehicles and fuel (1.0% 3m/3m vs 1.3% prior; 3.0% Y/Y vs 0.9% prior).
- Statistics Norway notes that pharmacies, grocery stores and stores selling beverages saw lower retail sales in December, but this was offset by increases in online shopping (for Christmas in particular).
- Overall, retail trade looks to have outperformed the -0.3% Q/Q expectation from contacts in the Q4 Regional Network Survey.
- The household goods consumption index – which feeds into the quarterly GDP calculation – fell 1.1% M/M in December but rose 1.0% on a 3m/3m basis (vs 0.5% prior).
