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Some retracement of yesterday; Powell's comments the highlight


Cored fixed income has come under some pressure today, with some decent moves, particuarly in gilts and Bunds, and especially at the front-end of the UK curve. However, despite these large moves, they generally account for well under 50% of a retracement of yesterday's rally.

  • Russia-Ukraine headlines continue to be the focus of the market, with some hope of a slowdown in the approach of Russian troops to Kyiv.
  • Data this morning has largely been ignored. German unemployment was lower than expected while the Eurozone flash HICP print came in above the stale consensus, but largely in line with the surprises seen in the national prints in recent days. ADP employment is the highlight of the US data session.
  • However, rather than focusing on data, markets will be more closely watching central bankers today, with Powell's testimony to the House at 15:00GMT / 10:00ET the highlight. There's a chance we might have a pre-release of the text 90 mins before that (13:30GMT / 08:30ET). In the past its sometimes been released the day prior to delivery after the US close (which is wasn't this time), sometimes ahead of the US Open, and sometimes there is no pre-release. There is no official confirmation either way.
  • We are also due to hear from Fed's Evans, Bullard, ECB;s Lane and BOE's Tenreyro and Cunliffe.
  • TY1 futures are down -0-12 today at 128-11+ with 10y UST yields up 1.9bp at 1.749% and 2y yields up 4.6bp at 1.389%.
  • Bund futures are down -0.12 today at 170.18 with 10y Bund yields up 3.8bp at -0.38% and Schatz yields up 4.1bp at -0.704%.
  • Gilt futures are down -0.34 today at 125.72 with 10y yields up 6.6bp at 1.192% and 2y yields up 13.6bp at 0.940%.

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