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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
BONDS
The re-steepening of the UK yield curve from multi-year flat/inverted levels was the highlight of Tuesday's European price action, with long-end yields soaring while short-end rates dipped modestly.
- The 17bp rise in 2s10s was the biggest since March 2020 (see chart below), and prior to that, 2012. Yields across the curve hit multi-year highs; 5s hit a 3-handle for the first time since 2009 while 30Y yields had the 2nd highest rise since 2009.
- The main driver pressuring the long end was concerns over the fiscal / issuance impact of incoming UK PM Truss's energy cost mitigation plan, which some headlines priced up at as much as GBP197bln.
- The German curve saw twist steepening but to a lesser degree than the UK.
- ECB Sept hike pricing dipped as low as 62bp after some market participants focused on MNI's sources piece citing a Eurosystem official saying he thought it was likely that Lagarde would opt for 50bp; however pricing drifted back up to 66bp: we note that the story contains multiple sources and as a whole is more nuanced, as indicated by the headline ("MNI SOURCES: Both 75, 50BP Still In Play As ECB Readies Hike.")
Closing Yields / 10-Yr Periphery EGB Spreads To Germany:
- Germany: The 2-Yr yield is down 0.9bps at 1.118%, 5-Yr is up 6bps at 1.414%, 10-Yr is up 7.5bps at 1.638%, and 30-Yr is up 4.9bps at 1.759%.
- UK: The 2-Yr yield is down 0.6bps at 3.203%, 5-Yr is up 10.5bps at 3.027%, 10-Yr is up 16.2bps at 3.101%, and 30-Yr is up 20.7bps at 3.413%.
- Italian BTP spread down 1.7bps at 236.2bps / Greek down 13.4bps at 260bps
UK 2s10s Spread - Daily Change In bpsSource: BBG, MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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