Free Trial

What to Watch: EU Energy Price Spike Weighs on Short End

MARKET INSIGHT

Tracking overnight price action in EGBs, Tsys trading mixed, bonds firmer but well off overnight highs (30YY tapped 3.1828% low, currently 3.2112%) yield curves flatter with short end underperforming, 2s10s -6.545 at -32.925.

  • Domino effect from soaring European energy prices (gas appr 10% higher, coal +5.1%) coupled with ongoing Russia/Ukraine war effect on gas prices and China growth slow-down is weighing on Euro, Sterling and short end EGBs on prospect of higher rates to contain inflation.
  • Policy focus on this week's annual Jackson Hole Economic Symposium: Reassessing Constraints on the Economy and Policy on Friday, August 26 as Chairman Powell discusses the Fed's economic outlook at 1000ET (0800 local), text is expected but no Q&A.
  • Otherwise, limited economic data today w/ Chicago Fed Nat Activity Index (-0.19 prior) at 0830ET
  • Treasury coupon auctions week:
    • $54B 13W, $42B 26W bill auctions today at 1130ET
    • $44B 2Y notes on Tuesday
    • $22B 2Y Note FRN reopen and $45B 5Y Note on Wednesday
    • $37B 7Y Note on Thursday
  • Equity earnings, still some notable announcements this week: Nvidia (NVDA) late Wednesday $508 est, Dell late Thursday $1.636 est

To read the full story

Close

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.