EUROPEAN FIXED INCOME UPDATE: UK debt remains in the doldrums

Analysis details (10:35)

Bunds and US Treasuries are off best levels (138.46 and 111-21+ respectively) amidst hawkish ECB rhetoric and an upturn in overall risk sentiment that has perked up hitherto weak Italian bonds, but Gilts are still deeply underwater after probing 94.00 within a 95.12-93.95 range vs last Friday’s 95.11 Liffe close. In sum, the BoE remains on course to end its temporary buy-back auctions at the end of the week and is switching to liquidity support via expanded collateral repos, also for a limited period to help banks with customers that are not entirely hedged against LDI exposure, while the OBR will now publish its medium term fiscal plan just before the next MPC rate meeting, which means a more informed decision, but not necessarily any more supportive in context of funding implications. More immediately, US employment trends are due even though it's Columbus Day and a partial holiday, and more Central Bank speakers are scheduled in the pm session, including ECB’s Lane, Fed’s Evans and Brainard.

10 Oct 2022 - 10:35- Research Sheet- Source: Newsquawk