EUROPEAN FIXED INCOME UPDATE: debt relapse and curve realignment

Analysis details (10:06)

It’s probably too premature to talk in terms of a turnaround Tuesday, but bonds recoiled relatively sharply at times amidst the resumption of bear-flattening following the recent plummet in yields and roll-back of rate hike expectations. Bunds topped out just over 137.00 and subsequently reversed through 135.00 to 134.83, Gilts came up a tick shy of 105.50 before retreating to 103.64 in the run up to the DMO’s Gbp 3 bn DMO 2033 sale (well received given the belated concession that pushed the average yield back up towards 3.5%), and the T-note tumbled to 113-22 from 115-07+ at one stage. EGBs still have supply to absorb via a German Bobl and multi-tranche Italian BTPs, while US CPI looms ahead of a speech from Fed’s Bowman at a very topical ‘Banking Event’, and the NFIB business optimism index ticked up marginally in February.

14 Mar 2023 - 10:06- Research Sheet- Source: Newsquawk