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EGBS: Curves Bull Steepen On More Aggressive ECB Rate Cut Expectations

EGBS
EurozoneBulletGlobalFixed Income BulletsRegionMarkets

EGB curves have steepened on the back of more aggressive ECB rate cut expectations, with the implied probability of a 50bp cut in December now at 40% (from 20% yesterday morning).

  • Reuters sources suggested policymakers have begun to debate if rates need to be cut below neutral to stimulate the economy.
  • The German curve has twist steepened, with 2-year yields almost 6bps lower and 30-year yields 1.5bps higher.
  • Increased odds of a Trump election victory continues to underpin long-end yields across core FI.
  • Germany will sell E4bln of the 2.60% Aug-34 Bund at 1030BST/1130CET.
  • Bund futures are -7 ticks at 132.76.
  • 10-year peripheral spreads to Bunds are tighter on the back of the increased rate cut expectations, with BTPs and GGBs outperforming.
  • ECB-speak headlines today’s regional calendar, with only October flash consumer confidence data due at 1500BST/1600CET.
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EGB curves have steepened on the back of more aggressive ECB rate cut expectations, with the implied probability of a 50bp cut in December now at 40% (from 20% yesterday morning).

  • Reuters sources suggested policymakers have begun to debate if rates need to be cut below neutral to stimulate the economy.
  • The German curve has twist steepened, with 2-year yields almost 6bps lower and 30-year yields 1.5bps higher.
  • Increased odds of a Trump election victory continues to underpin long-end yields across core FI.
  • Germany will sell E4bln of the 2.60% Aug-34 Bund at 1030BST/1130CET.
  • Bund futures are -7 ticks at 132.76.
  • 10-year peripheral spreads to Bunds are tighter on the back of the increased rate cut expectations, with BTPs and GGBs outperforming.
  • ECB-speak headlines today’s regional calendar, with only October flash consumer confidence data due at 1500BST/1600CET.