[MARKET UPDATE] OATs open with gains of c. 70 ticks, after Moody's held the rating steady on Friday

• Bunds pulled higher by a handful of ticks alongside this.

A ratings hold where a cut had been priced is the classic squeeze setup in OATs: shorts positioned against a downgrade cover into the relief, and the initial gap higher tends to be sharpest precisely because the event removes a tail rather than adds new information. The size of the open, around 70 ticks, is consistent with that pattern rather than with a re-rating of the fundamental story, which the agency has left unchanged. What has historically mattered after such reprieves is the outlook language and the rationale on deficits and the political path, since a hold with a negative outlook has tended to only defer the decision to the next review date rather than settle it. The modest co-move in Bunds is the standard tell: a France-specific relief episode compresses the OAT-Bund spread rather than moving the core, and the persistence of that compression into the cash session and the week's supply is the better gauge of whether fast money is done or whether real money follows. Worth noting is that spread compression on hold outcomes has in past episodes faded once attention returns to budget arithmetic, so the follow-ons are any political developments on the fiscal side and the calendar for the other agencies still to opine.