EUROPEAN FIXED INCOME UPDATE: A growing EU/US debt divide

Analysis details (10:45)

It may be largely a case of time differentials, but it seems more fundamental and purposeful as Eurozone bonds continue to recoup losses and drag Gilts back up with them, while US Treasuries lag after extending their rebound with extra incentive via a well subscribed 20 year note sale to hit peaks overnight. Clearly, lags between Fed, ECB and even BoE policy cycles are another factor and minutes from the GC should underline the divergence in terms of rates and QE. Looking at price action in more depth, Bunds have been up to 169.80 (+42 ticks on the day and 85 ticks off midweek lows), Gilts as high as 122.67 (39 ticks above par vs -4 ticks), while the 10 year T-note hovers just under its peak within a 127-22/08 range and the curve is essentially flat. Ahead, busy pm line up beyond the aforementioned ECB minutes, with several US data/survey releases and 10 year TIPS issuance after details of 2, 5 and 7 year offerings for next week. 

20 Jan 2022 - 10:45- Fixed Income- Source: Newsquawk