EUROPEAN FIXED INCOME UPDATE: Gilts and Sonia strip boosted by BoE

A very well received 2036 German auction could culminate in Bunds topping their current Eurex recovery high of 165.92 vs a 165.39 low, but for now it is UK debt that is staging a more emphatic comeback on Liffe to 120.97 from 120.44 at one stage. In short, BoE testimony to the TSC via several MPC members on both sides of the hawk and dove divide suggests that calls for 50 bp hikes will die down in future, if not be withdrawn completely as the preferred path towards further tightening is measured. Hence, the rebound in STIR contracts is arguably even more impressive to +3.5 tick peaks from -7 tick lows. Elsewhere, US Treasuries continue to lag just under par, albeit off overnight troughs in the run up to Usd 53 bn 5 year supply on an otherwise light pm docket. 

23 Feb 2022 - 11:03- Fixed Income- Source: newsquawk