ECB: Simkus Provides Support For 3 More Cuts This Year

Schatz Swap related trade, suggest Payer:

• DUH5 ~5.3k at 106.62.

In outright futures, Bund still look at closing the opening gap to 131.76.

We have published and e-mailed to subscribers the MNI Canada CPI Preview ahead of today's release, with a particularly wide range to analyst estimates owing to uncertainty over when a temporary tax holiday will have greatest impact. 

Please find the full report here. 

Bund futures have weakened through the morning, with the weaker-than-expected German ZEW survey providing little reprieve. Futures are -2 ticks today at 131.82.

• Fallout from US President Trump’s inauguration remains a key focus, with Bunds having moved away from overnight highs alongside Treasuries as markets assess the President’s jawboning around tariffs. Today's EGB supply developments will have also factored into price action.
• Bund futures have entered a corrective phase following the recovery from the January 14 lows, and a continuation higher would open 132.41, the 20-day EMA. The medium-term trend is unchanged though, it remains bearish.
• The German curve has twist flattened, with 2-year yields 1bp higher and 30-year yields 2.5bps lower.
• Orderbooks for today’s 15-year OAT syndication are in excess of E135bln, a record size for a French transaction. MNI expect a size of E5-8bln, with upside risks of E9-10bln.
• Lithuania are also holding a dual-tranche syndication today, while Germany has held a conventional green Bund auction.
• Spain has issued a mandate for a new 10-year Obli. We pencil in a transaction size of E10-15bln.
• 10-year peripheral spreads to Bunds are within 1bp of yesterday’s closing levels.
• ECB dove Centeno is scheduled to speak at 1100GMT/1200CET.