EUROPEAN FIXED INCOME UPDATE: debt derailed by hard data and hawkish vibes

Analysis details (10:54)

The bull run in bonds may have petered out amidst pre-weekend positioning and the fact that the last trading session of October falls on Monday, while Bunds and the T-note were probably hesitant on approach of 141.00 and 112-00 for psychological reasons, but the former was clearly knocked out of stride by the strength of NRW CPI that set the tone for most other German states. Moreover, comments from ECB’s Kazmir countered the dovish leanings on rates revealed by sources and the chart backdrop turned more emphatically when support in the form of a 50% Fib retracement of yesterday’s move from trough to peak gave way. Hence, the 10 year benchmarks are now nearer the base of 140.92-138.56 and 111-30/01 ranges ahead of prelim national German inflation data, US PCE, ECI and pending home sales. Conversely, Gilts remain relatively underpinned between 102.57-103.73 parameters and still above peaks seen before the UK mini budget and collapse to 90.38 just over two weeks ago.     

28 Oct 2022 - 10:54- Research Sheet- Source: Newsquawk