EUROPEAN FIXED INCOME UPDATE: bonds chop, churn and decouple

Analysis details (10:27)

Having moved largely in unison for the most part this week, debt futures diverged to a degree amidst whip-saw moves often lacking any obvious fundamental catalyst. Instead, Bunds, Gilts and US Treasuries saw bouts of consolidation and some technical trading in typical Friday fine-tuning fashion, as the 10 year benchmarks flitted between 133.18-132.69, 95.02-94.53 and 113-01+/112-21 respective ranges in rather random price action. Conversely, there was more order and logic behind the volatility in JGBs as they fell amidst speculation that the BoJ is likely to upwardly revise its inflation forecast this month and perhaps tweak the YCT to a 100 bp upper from the current 50 bp before bouncing when the Bank announced that the first workshop for its broad and long term policy review will not be held until December.  

14 Jul 2023 - 10:27- Research Sheet- Source: Newsquawk