EUROPEAN FIXED UPDATE: In the red into the ECB and US data thereafter
USTs: -5 ticks, 110-17
- In the red but only modestly so. Action which came after a selloff emerged at the end of Wednesday’s US session into settlement, no specific driver behind this at the time.
- Aside from the ECB (see Bunds) the docket is headlined by US data with PPI in focus after Wednesday’s CPI, alongside weekly claims where initial claims are seen paring to 220k from 224k, while continuing claims are seen rising to 1.875mln from 1.871mln.
- Currently at a low of 110-16 and continuing to slip from an initial 110-24 high print. Amidst this, yields are bid across the curve which itself has a slight steepening bias.
Bunds: -35 ticks, 135.60
- Awaiting the ECB. Macro drivers otherwise have been somewhat light aside from the SNB which delivered a 50bps move. An announcement which sparked some modest EGB upside.
- From the ECB, a 25bps move is expected. Focus then turns to the macro projections which will be slightly softer on the growth front, but somewhat stale if the usual collection period holds as this will not encapsulate ongoing French political turmoil.
- As it stands, Bunds are at a 135.56 base having faded from an SNB-driven peak of 135.85, downside which was marginally added to by SNB’s Schlegel remarking that they do not like negative rates and the likelihood of a return to NIRP is small.
OATs: -20 ticks, 125.90
- President Macron is expected to announce his new PM today. As it stands, it is unclear who Macron will propose with the likes of former Justice Minister Bayrou and current Defense Minister Lecornu among those touted.
- However, reporting in recent sessions suggests that Macron has not been able to widen the support base beyond what Barnier had; as such, it remains to be seen what if anything the new PM will be able to achieve.
- In terms of timings, Macron is in Poland until the evening and as such any announcement may come later in today’s session.
Gilts: -36 ticks, 94.91
- In-fitting with peers. Lost the 95.00 mark early doors and has since slipped to a 94.89 base.
- Drivers limited into GDP tomorrow and then numerous metrics next week before the December BoE announcement, where market pricing implies just a 10% chance of a rate cut.
12 Dec 2024 - 10:00- Fixed IncomeData- Source: Newsquawk
Subscribe Now to Newsquawk
Click here for a 1 week free trial
Newsquawk provides audio news and commentary for over 15,000professional traders and brokers worldwide. Services include:
- Real-time audio coverage from 0630 to 2200 London time plus Asia-Pac 2200 to 1000 London time
- Teams of analysts covering equities, fixed income, FX, energy, and metals markets
- Real-time scrolling news service with instant analysis
- Daily and weekly pre-market research and calendars
- Video updates covering near-term key risk events & primary trading themes
- One-to-one chat with our expert analysts