EUROPEAN FIXED INCOME UPDATE: bonds bounce firmly and roundly

Analysis details (10:26)

Bunds got a big boost from Ifo given that the business climate deteriorated more than anticipated and expectations were especially weak against consensus to outweigh marginally better than forecast current conditions, not to mention the institute delivering a rather downbeat assessment of the German economy (in short, the prospects of Q2 contraction have risen amidst weak demand and a decline in the backlog of orders). However, recovery was already underway after a downturn in stocks that looked somewhat order driven at the start of a week that culminates in month, quarter and the end of H1. The core Eurozone debt future extended to 134.93 from 134.04 Eurex low and 134.28 prior session close, Gilts tagged along, though with a lag between 95.75-96.39 Liffe parameters vs last Friday’s 96.07 settlement price and the T-note touched 113-15 compared to 113-03+ at one stage. Ahead, EU supply, UK CBI distributive trades, Dallas Fed manufacturing, Usd 42 bn 2 year auction and the official opening of the ECB’s Sintra Forum.     

26 Jun 2023 - 10:26- Fixed IncomeResearch Sheet- Source: Newsquawk