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Needle Still Points South


Yields Bounce as Equities Make New Monthly Highs


Heading North


Bull Rally Accelerates


Economists Survey Raises 2021 CPI Forecast To 4.9%

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Another big session in terms of volumes for Bonds.

  • Bund and EGBs have extended lower this morning after the Hawkish BoE stunned the markets yesterday.
  • Bund is off the low, after testing initial support noted at 170.20 (did print 170.17 low).
  • A clear break below 170.00,would open to next yield level seen at -0.178%, which today, reference 170.26, would equate to 169.50.
  • Gilts were initially wider against Germany but are back to flat at the time of typing.
  • The spread traded at 117.5bps in early trading, to the widest levels since 2019.
  • Next resistance is at that 2019 peak 121.0123, which is also the widest level since June 2016.
  • The spread is now at 116.3
  • US treasuries are also down but are better bid on the margin, bringing the Tnote/Bund spread 3.5bps tighter on he session.
  • Looking ahead, we have no real market moving data, and focus turns on speakers, including ECB Elderson, Lane, Fed Mester, Powell, Clarida, Bowman, George, Bostic, BoE Tenreyro
  • After markets we get ratings from Fitch on Belgium, S&P on Germany, DBRS on Finland