EUROPEAN FIXED UPDATE: Benchmarks relatively contained into a packed US session

USTs: -5 ticks, 111-23

• A contained start for fixed income given the Japanese holiday (Showa Day) overnight, meaning that there was no cash trade.


• USTs currently at the lower-end of a very thin 111-22 to 111-30 band and one that is within Monday’s 111-10 to 111-31 confines.


• Another busy day of earnings stateside (see equities) alongside more media rounds from US Treasury Secretary Bessent (reminder, his commentary yesterday made clear that onus for taking the next step is firmly with China), thereafter Commerce Secretary Lutnick is scheduled; both officials will be sought for anything new on tariffs/trade, after the WSJ source report on a potential moderation to auto measures.


• Officials aside, the data docket is equally as busy with March’s JOLTS and April’s Consumer Confidence the highlights. JOLTS is expected to dip from 7.568mln to 7.48mln while Consumer Confidence is seen dropping to 87.5 from 92.9, follows a abysmal Dallas Fed on Monday after which some desks are highlighting a downward bias to Thursday’s ISM Manufacturing consensus of 48 (prev. 49).


• Into all this, with cash trade back underway, yields are bid across the curve and as a whole is slightly flatter overall. In terms of Fed pricing, markets currently assign just a ~10% chance to a May move with a 25bps cut not priced until July (-37bps), of course, we will know more after today’s data and metrics later in the week, incl. Payrolls on Friday.

Bunds: +10 ticks, 131.38

• Supply of note with sizable Italian lines due shortly and also French green syndication from which desks look for around EUR 7bln to be tapped. Interestingly, Alphabet this morning commenced the debut sale of EUR-denominated debt via 4yr, 8yr and 12yr issuance.


• The announcement of the Alphabet issuance came just before the April Flash Spanish inflation metrics, EZ HICP due on Friday. Spain’s inflation printed hotter-than-expected across the board and sent Bunds to a 131.16 low with Alphabet’s presence in the market perhaps also weighing.


• Thereafter, Bunds have recovered a touch and are back into the green and just off a 131.46 session high, a high that printed as the European risk tone came under a little bit of pressure after the Russian Kremlin said Ukraine has not responded to its latest ceasefire proposal. Note, around the same time, the ECB CSE maintained the downbeat growth view and increased inflation expectations, i.e. a stagflationary environment.

Gilts: +3 ticks, 93.06

• Flat given the lack of leads from sparse overnight trade and a European morning that has been devoid of UK-specifics aside from earnings.


• At the lower end of a 92.96 to 93.25 band, comfortably within Monday’s 92.79 to 93.33 range.


• The session ahead has I/L supply and thereafter commentary from BoE’s Ramsden (text). Ramsden hasn’t spoken on policy since late-February when he outlined a cautious and data-dependent approach to descending the Table Mountain.


• After Ramsden, attention will turn to the aforementioned US officials, media appearances will be closely scrutinised for anything on UK-US trade ties after the White House Press Secretary said talks with the UK are moving in a “very positive” way.

29 Apr 2025 - 10:00- Fixed IncomeEU Research- Source: Newsquawk