EUROPEAN FIXED INCOME UPDATE; debt divergence, dislocation and decoupling
US Treasuries remain somewhat sidelined and relatively contained after more spill-over from Wall Street’s recovery feats during overnight trade, but EU bonds have more than made up for the lack of price action with further range extensions and deviations in direction. Bunds staged a more pronounced bounce when EU equities were on the verge of wiping out the bulk or even all their recovery gains, and reached 167.20 (+27 ticks vs -62 ticks on the day at one stage) before fading again, in contrast to EZ periphery peers and Gilts that are still above par and close to intraday highs (latter 121.29 on Liffe for a ¼ pt gain vs 32 tick loss). No obvious rhyme or reason for the divergence, but the ongoing volatility is understandable as markets continue to monitor headlines, while more hawkish positioning and pricing for the BoE relative to the ECB may also be a factor as rate hike expectations are pared generally given the Russia-Ukraine situation.
25 Feb 2022 - 11:04- Fixed Income- Source: newsquawk
Subscribe Now to Newsquawk
Click here for a 1 week free trial
Newsquawk provides audio news and commentary for over 15,000professional traders and brokers worldwide. Services include:
- Real-time audio coverage from 0630 to 2200 London time plus Asia-Pac 2200 to 1000 London time
- Teams of analysts covering equities, fixed income, FX, energy, and metals markets
- Real-time scrolling news service with instant analysis
- Daily and weekly pre-market research and calendars
- Video updates covering near-term key risk events & primary trading themes
- One-to-one chat with our expert analysts