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  • Once again, much focus was paid to the higher front-end of the UK Gilt curve, with money markets bringing forward pricing for the expected beginning of a tightening cycle from the BoE. Despite the move in UK fixed income, GBP is seeing no reprieve, with the currency strictly mid-table against the rest of G10.
  • Nonetheless, GBP/USD 3m risk reversals capture the date of a possible BoE rate hike and remain heavily in favour of puts over calls, reinforcing the narrative that GBP may not benefit from the imminent beginning of higher rates.
  • Early trade saw a return lower for EUR/USD, partially reversing some of the strength seen late last week off the 2021 low of 1.1524.
  • The greenback is the best performing currency in G10 ahead of the NY crossover, returning the USD Index back above the 94.00 handle, although remains well off the best levels of last week at 94.561.
  • Data points are few and far between across Europe, with focus turning to US industrial production data at 1415BST/0915ET. There are a series of CB speakers, with BoE's Cunliffe, Fed's Quarles & Kashkari on the docket, although none speak directly on monetary policy.