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Curves Flatten On Day, Central Bank Pricing Off Friday’s Dovish Extremes

BONDS

Little to really add to earlier bond commentary, with the unwind from Friday’s post-Powell/Villeroy dovish session extremes in the STIR space helping core bonds off Friday’s best levels, as participants question the viability/speed of easing priced into the major curves at present.

  • US & UK curves bear flatten, while the German curve twist flattens.
  • This afternoons ‘s appearance from ECB President Lagarde (on "Monetary policy and optimal management of one of the two most important central banks in the world") may provide a platform to push back on current pricing (~133bp of cuts showing for ’24 on the whole), although the Bank may hold off until next week’s meeting before providing commentary on that matter/its expectations.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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