EUROPEAN FIXED UPDATE: Firmer amid the softer European tone but largely awaiting a packed speakers docket, and data later this week

USTs: +5 ticks, 112-22

• A contained overnight session for USTs. Meandered within a narrow 112-15 to 19 range early doors with specifics light and participants preparing for a week of delayed data to finally start hitting and a substantial amount of Fed speak; into this, the odds of a cut in December have slipped to c. 40% vs the ~50% seen last week.


• Thereafter, the early European morning saw a modest deterioration in the region's risk tone (though, US futures remained strong), which provided some modest support to benchmarks generally. Lifting USTs further into the green and to a 112-22+ peak. If the move continues, we look to 112-23 from Friday before 112-31 and 113-00 from the two sessions prior.


• Today’s docket is dominated by Fed speak, where Williams (voter), Jefferson (voter), Kashkari (2026) and Waller (voter) are all due. From those, we expect Jefferson and Waller to provide texts, Jefferson and Kashakri to partake in Q&A’s while Williams is not expected to provide either.


• Williams is, despite the topic he is scheduled on, perhaps the most anticipated FOMC speaker today after the FT scooped on Friday that Williams convened a meeting of fixed-income representatives from numerous primary dealers on Wednesday to seek feedback on the effectiveness of the standing repo facility. A meeting that occurred in the context of an increase in the proportion of repo transactions occurring above the interest level on reserve balances.

Bunds: +8 ticks, 128.74

• Overnight action was contained and similar to that outlined in USTS. Until the arrival of European participants, where a bout of upside occurred as the European risk tone deteriorated.


• Newsflow is relatively light and the move isn’t a particularly pronounced one, with Bunds firmer by just over 10 ticks at most at a 128.79 peak. If this continues, we look to 128.97 from Friday after which there is a gap until the figure and then levels between 129.19-40 from last week.


• The docket ahead has ECB’s Lane scheduled, though only a slide release is expected. Earlier, the ECB announced a review of its risk control framework, and as such it is possible his remarks will focus on that.

Gilts: +12 ticks, 92.27

• Firmer, just about outperforming peers but the magnitude of action is also modest thus far. Gapped higher by 20 ticks to above the 92.05 mark before briefly losing the figure and then conformed to peers and lifted to a 92.29 peak, with gains of 14 ticks at most.


• Newsflow remains firmly focussed on the budget, and while there have been several scoops and reports around what Chancellor Reeves may do, there has not been anything of the magnitude seen last Friday. This week, the main focus point is Wednesday’s CPI, a series that provides early insight into the December deliberations, where Bailey may have to play the tie-breaking role once again.


• Into this, markets ascribe just over a 70% chance of a cut, awaiting next week’s budget and then this week and the November CPI (due just before the December BOE) before making a firm determination on a cut or a hold in December.

17 Nov 2025 - 10:05- Fixed IncomeEU Research- Source: Newsquawk