EUROPEAN FIXED INCOME UPDATE: some debt redemption and firm BTP bounce

Several factors behind the partial recovery in bonds, aside from some understandable short covering and consolidation, with Eurozone debt perhaps taking some heed of latest comments from ECB’s Kazmir reiterating the view that inflation should peak soon before slowing. However, this is far from fresh insight or a revelation, so the pronounced rebound in Italian BTPs may be more due to relief that round four of the Presidential Election process only requires a majority vote to find a victor. Meanwhile, the post-Fed presser pressure remains more intense at the short end, so Bunds, Gilts and US Treasuries could be paring some declines on spread and curve positioning, as the respective 10 year benchmarks trade closer to 170.15, 122.57 and 127-17+ peaks than 169.67, 122.30 and 127-09 troughs. Ahead, busy pm data agenda and the third leg of this week’s US auction remit sees Usd 53 bn 7 year notes offered.

27 Jan 2022 - 11:14- Fixed IncomeData- Source: newsquawk