Swaps - EUR
Any V-shaped recovery in fixed income volumes is firmly on hold. Today Bund buying flow has driven the EUR market despite promising German data.
Traders attributed today’s steeper curve and bearish tone to thin summer markets and central bank buying rather than any correlation with stocks.
Second wave talk has taken Bund yields to 3-month lows. Meanwhile views on the curve are straightforward, some see it steepening, others flattening.
The Bund is under pressure and ASWs are tighter as long Treasuries sink. Bank strategists look at the Buxl. SocGen and HSBC report FICC and FVA.
Bunds are edging up with volumes supported by month end. Banks suggest hedges for a second Covid wave. BNPP and NatWest report FIC, VaR and hedges.
A lack of new Euro issuance and the Fed keeping rates and the pace of asset purchases unchanged has flattened the Euro curve in risk-off trading.
Bear steepening and mild risk-on sentiment characterised European fixed income this lunchtime as the market focuses on this evening's Fed announcement
A very short list of new euro issues today includes deals from State Grid (China) and Rhineland-Palatinate.
€STR activity after the big bang switch is discussed
The big bang transition to €STR CCP discounting came into force today, leaving some dealers to question whether the switchover has underpinned rates.