US 10YR FUTURE TECHS: (M5) Trend Needle Points North

Fresh demand for Bund and Gilt futures over the last 20 minutes, with the German contract still marginally outperforming Gilts on the session. 

• Bund futures are -16 ticks at 132.06, up from a session low of 131.72. The stronger-than-expected German ZEW survey had little lasting market impact. A better indication of German sentiment will follow on Friday with the February flash PMIs.
• Today’s E4.5bln 2.20% Mar-27 Schatz supply has been digested smoothly
• German yields are flat to 0.7bps higher at typing, while EGB spreads are biased tighter. The 10-year BTP/Bund spread has pushed through 106bps, with the psychological 100bp handle coming into view,
• Gilt futures are at session highs of 92.77, but are still down 20 ticks on the day. The 10-year Gilt/Bund spread is 1bp wider at 204.5bps.
• This morning’s labour market data sent stronger-than-expected signals from the quantity side of the labour market, while pay growth was only a touch softer than expected.
• Little market moving commentary from BOE Governor Bailey, who noted that the labour market report has not fundamentally changed the outlook, while reiterating the meaning of “careful” in the bank’s rate guidance.
• The 4.00% Oct-63 Gilt saw decent demand metrics.
• ECB Executive Board Member Cipollone speaks on the ECB’s balance sheet at an MNI Event at 1400GMT/1500CET (sign up here).

SX5E (16th May) 4425/4375ps, bought for 1 in 12.5k.