EUROPEAN FIXED INCOME UPDATE: bonds backtrack abruptly

Analysis details (10:58)

Germany’s 2 year tap drew tepid demand and the results came out only minutes after reports in the Handelsblatt providing excerpts of Wednesday’s Autumn forecasts from German Economy Ministry, so it’s hard to tell what rattled Schatz and Bund futures, but both retreated to new intraday lows and the latter just under Monday’s 135.83 session base, at 135.81. Meanwhile, Gilts were still digesting details of the DMO’s 2051 linker sale that saw a strong bid/cover ratio, albeit bolstered by the BoE buy-backs and coming with a hefty price tag before headlines from the UK’s Pension Fund Trade Body imploring the Bank to extend its emergency measures through the end of October, if not longer. The 10 year debt future also recoiled to a deeper Liffe low (92.06) before bouncing and thereby remaining ‘comfortably’ off yesterday’s 91.46 trough. Elsewhere, US Treasuries are narrowly mixed and sidelined awaiting the return of cash traders, more Fed speakers and Usd 40 bn 3 year issuance.   

11 Oct 2022 - 10:58- Research Sheet- Source: Newsquawk