EUROPEAN FIXED INCOME UPDATE: debt diverges as Fed fallout fades

Analysis details (10:56)

Bonds began the session reflecting and consolidating in wake of the FOMC, but Bunds broke ranks along with Eurozone peers as thoughts turned to the ECB that is not expected to deliver a ‘dovish’ 25 bp hike like the Fed and could even stick to its 50 bp pace instead. Meanwhile, Gilts have retreated even further from best levels in wake of decent upward revisions to the UK’s final services and composite PMIs to leave Treasuries alone above parity, albeit well off overnight highs ahead of Challenger layoffs, trade, jobless claims and unit labour costs. Looking at prices more precisely, the 10 year German benchmark is clinging to the 136.00 handle between 136.66-135.95 bounds, its UK peer is hovering just above the low end of a 101.37-93 range and the T-note is 10/32 ahead within a 116-25+/05 band. 

04 May 2023 - 10:55- Research Sheet- Source: Newsquawk