EUROPEAN FIXED INCOME UPDATE: debt fatigue and divergence

Analysis details (10:43)

Gilts were on the wane when early upside euphoria fell short of the mark in context of matching yesterday’s high and they failed to sustain 102.00+ levels, but the subsequent retreat to 100.89 (-49 ticks on the day vs +76 ticks at the Liffe peak) was supply-related as the DMO’s 7 year tap was less than twice oversubscribed, albeit marginally. Meanwhile, Bunds and Eurozone peers have also recoiled, former from 138.81 (60 ticks above par) towards 138.00 and BTPs post-mixed Italian auctions, to leave US Treasuries as the last bonds standing firm in something of a role reversal from recent trends. Ahead, busy pm agenda comprising US housing and trade data, 5 year note supply, but likely headlined by the BoC. 

26 Oct 2022 - 10:43- Fixed IncomeResearch Sheet- Source: Newsquawk