EUROPEAN FIXED INCOME UPDATE: Gilts retain upper hand ahead of BoE and ECB

Analysis details (10:43)

US Treasuries seem to have gleaned as much as they can from Wednesday’s dovish Fed vibes and EGBs appear to have exhausted their piggy-back bullish momentum as OATs and Bonos also take time to absorb French and Spanish supply, but there’s no stopping UK debt as Gilts reach 105.75 (129 ticks above par) approaching midday when the BoE is seen paving the way for the ECB with another half point hike. However, the devil or divergence is expected in the detail as MPC division is widely expected again and markets anticipate less forceful tightening guidance in contrast to a repeat of the significant tightening message from the GC. Bunds remain bid, but towards the lower end of a 137.00-62 range and the T-note is softer on the day between 115-18/10 parameters awaiting jobless claims and factory orders.   

02 Feb 2023 - 10:43- Fixed IncomeResearch Sheet- Source: Newsquawk