Coiling

Core global FI markets continue to coil on Tuesday, with a holiday-shortened U.S. week eyed.

• The impending meeting minutes from the U.S. FOMC, Canadian CPI, U.S. data and the UK Autumn fiscal Statement provide points of interest over the next 24 hours or so. Elsewhere high-ranking ECB officials (Lagarde and Schnabel) will speak today.
• Central bank speak has been familiar thus far, with ECB and BoE communication generally underscoring the higher for longer narrative, while some pushback vs. market pricing of cuts was evident. That hasn’t been a meaningful needle mover for market pricing as central banks have been highlighting the higher for longer narrative for some time.
• Core global FI futures don’t stray too far from the middle of relatively narrow ranges.
• Cash Tsys yields are 1-2bp firmer on the day, with light bull flattening in play.
• German yields are 1bp higher to 2.5bp lower on the day as the curve twist flattens.
• UK benchmark yields are 1.5bp higher to 1.5bp lower as the curve twist flattens. BoE speak has applied some marginal pressure to the front end.
• Note that crude oil futures are a touch below yesterday’s best levels, while EUR 5y5y inflation-linked swaps are a little blow yesterday’s peak after the recovery in crude oil futures allowed the measure to tick away from last week’s multi-month base.