EUROPEAN FIXED INCOME UPDATE: bonds straddle parity after big figure swings

Analysis details (11:02)

Volatile trade in debt futures following the BoJ’s policy meeting overnight, UK inflation data and commentary from ECB’s Villeroy, as Bunds and Gilts settle down after making round trips from early peaks to troughs within 139.99-138.97 and 104.97-103.97 respective extremes. To recap, upside was seen in the slipstream of JGBs when a clear majority of the market looking for a further YCC target range extension were left overexposed, but then core and services prices in the UK beat consensus to thwart bulls along with remarks from the GC member that contradicted dovish source reports out on Tuesday. However, US Treasuries are holding a firmer line and the curve is a tad flatter as the spotlight turns towards a packed pm agenda, including top-tier US data, Fed speakers and 20 year note supply. For the record, long-dated German taps were reasonably well received, but hardly impacted.

18 Jan 2023 - 11:02- Research Sheet- Source: Newsquawk