Bunds: buyers back in control

The risk pendulum continues to swing, and presently back towards aversion as improving sentiment due to NK’s offer to discuss denuclearisation has been more than offset by the latest White House wrangling over US President Trump’s import tariff proposals. The 10 year German debt future was marked up 18 ticks initially to 156.75 (June contract now the front month) and extended early gains to 31 ticks before losing some momentum ahead of near term resistance around 156.95 and drifting back to a 156.67 low. Once again, core EU bonds await the return of cash equities to see the extent of the fall-out from declines across Asia-Pac bourses and US stock futures overnight, with some consideration for upcoming supply in the form of Eur4 bn Bobls. Data-wise, Eurozone GDP ahead, but unlikely to provoke much reaction given the March ECB meeting looming tomorrow and markets eager to glean any nuances about a change in forward guidance.