Hiking expectations driving fixed income

Core fixed income reached new recent lows this morning. Gilt futures their lowest level since February 2019, Bund futures their lowest levels since May 2021 and TY1 futures their lowest level of the month. Expectations of monetary policy tightening is driving the moves with equities moving lower as a result with money markets moving lower, led by short sterling.

• UK Prime Minister Boris Johnson's speech at 11:30BST/6:30ET will be watched today after his comments yesterday reiterating that we wanted the UK to move to a high wage, high productivity economy and that wages needed to rise. Any announcement on the future of the minimum wage would be closely watched (but is not expected until the Budget).
• Later today we also see the ADP employment report but there are not many other notable speakers scheduled.
• TY1 futures are down -0-3+ today at 131-20 with 10y UST yields up 1.7bp at 1.544% and 2y yields up 0.3bp at 0.289%.
• Bund futures are down -0.20 today at 169.46 with 10y Bund yields up 1.8bp at -0.171% and Schatz yields up 0.7bp at -0.705%.
• Gilt futures are down -0.39 today at 124.25 with 10y yields up 4.8bp at 1.131% and 2y yields up 4.6bp at 0.494%.