USDCAD TECHS: Key Near-Term Support Remains Intact For Now

Estox 50: -0.03%, Dax: +0.14%, CAC: +0.06%, FTSE -0.05%, SMI +0.51%.

• German 10yr Yield is looking to test the 2.50% right here, both Bund and Buxl have broken through last Week's low, Bobl would need a break through 117.19 which is right here.
• The move in European Govies is dragging Tnotes (TYH5) through its low, in turn providing a bid into the USDJPY.

Euribor futures are being dragged lower by core EGBs this morning, now -1.0 to -6.0 ticks through the blues. European bonds have seemingly been pressured by the prospect of increased defence spending following a US-brokered peace deal between Russia and Ukraine. An unwind of geopolitical risk premium and upside growth risks in the event of a deal may also be factoring in.

• Downside in ERZ5 remains contained by the US CPI inspired Feb 12 low at 97.955.
• ECB-dated OIS are up to 2.5bps more hawkish through year-end, with 75bps of easing now priced through December.
• This is consistent with the median forecast of sellside analysts MNI tracks, though the mean of ~1.9% suggests risks are skewed towards more aggressive easing.
• Over the weekend, ECB’s Panetta struck a characteristically dovish tone in his first comments since November. He argued that “a less decisive easing of monetary policy could lead to excessively low inflation in the medium term”, with downside risks largely stemming from weak growth.
• Today’s regional data calendar is light. Bundesbank President Nagel speaks on the German economy at 1100GMT.