EUROPEAN FIXED INCOME UPDATE: debt futures fade after upside flurry

Analysis details (10:50)

Bonds garnered more momentum through a series of chart and psychological hurdles with little sign of caution or concession for supply amidst comments from ECB’s Holzmann hinting at no haste in terms of QT until Bunds got to within 5 ticks of Monday’s w-t-d peak, Gilts topped 103.00 and the T-note bounced almost ½ point from overnight lows. However, fatigue finally set in before Germany’s new 2033 offering and the 10 year future remains off best levels between 136.46-137.33 parameters digesting somewhat lacklustre demand vs a sub-coupon average yield and relatively small retention. It remains to be seen whether the US sale entices more buyers with cash trading closer to 3.60% than 3.50% and keeps Treasuries elevated and the curve flatter, as the T-note hovers within a 114-13+/113-31+ range and its UK peer retains a 76 tick gain on the day having been 121 ticks above par at best (137.08) and 32 ticks over at ‘worst’.

11 Jan 2023 - 10:50- Research Sheet- Source: Newsquawk