TURKEY: Reuters Say CBRT Intervened Indirectly in FX Market via Public Banks

Gilt futures have moved away from session lows (-72 ticks at 92.58), but Bunds are making another test of the 132.00 handle (-83 ticks at 132.02).  Bund futures have pierced trendline support drawn from the Jan 15 low at 132.05, but better support is seen around 131.97, equating to the 2.50% yield level in the 10-year Bund. Weakness in German paper sees 10-year EGB spreads to Bunds tighten up to 1.5bps today.

• The prospect of increased European defence spending in the event of a US-brokered peace deal between Russia and Ukraine seemingly weighed at the open. An unwind of geopolitical risk premium and upside growth risks in the event of a deal may have also factored into the selloff.
• Meanwhile, the latest BBG sources story has pointed to a possible delay of OPEC supply increases.
• The Eurozone trade surplus printed close to consensus in December, at a seasonally adjusted E14.6bn.
• The ESM is launching a 10-year Feb-35 bond via syndication today (E2bln WNG).
• Gilt futures troughed at 92.48, leaving the Feb 12 low at 92.31 untouched for now.
• BOE Governor Bailey said the slightly stronger-than-expected flash Q4 GDP print do not alter the general story for the UK economy, while re-iterating the Bank’s gradual and careful approach to rate cuts.
• Headlines around Russia/US talks around Ukraine will be in focus for the rest of the session, with US cash markets closed for the Presidents Day holiday. 

UKX (21st Feb) 8700, bought the call for 14.5 in 2k (100% Del).