EUROPEAN FIXED UPDATE: Modest EGB extension in contained pre-NFP trade

Analysis details (10:35)

• Bunds came under some modest but ultimately shortlived pressure during APAC trade, with remarks from ECB President Lagarde in focus, though she offered little new. Instead, the move appeared to be more of a pause for breath rather than an attempt at a concerted pullback from the prior session’s significant advances amid Fed rhetoric and US data. Currently, Bunds are holding around 15/20 ticks shy of the session peak, which itself is marginally sub-143.00 having eclipsed the October 4th 142.87 high early in the European morning. After 143.00, trend resistance resides at 143.15 with 143.26 and 143.63 touted thereafter.


• Overall, EGB action is fairly minimal in the context of recent sessions but isn’t particularly surprising ahead of the US NFP jobs report later today with USTs themselves essentially unchanged heading into the release. Specifically, USTs are posting upside of just a handful of ticks towards the top-end of slim 114.13+ to 114.23 parameters. For the release, after the headline, focus will fixate on the wage components given the Fed’s inflation focus ahead of the December FOMC and in particular after Chair Powell nodded to a potential slowdown in the pace of tightening as early as that gathering.


• NFP aside, newsflow this morning has been slim and insufficient to impact the above price action. Additionally, the docket ahead is devoid of Tier 1 events aside from a handful of Fed speakers after ECB’s de Guindos at midday (who spoke numerous times in November) given the Fed enters its blackout period this weekend.

02 Dec 2022 - 10:35- Research Sheet- Source: Newsquawk