Global Rates Weeklysee more…

  1. Rates Weekly: More US 2s10s Inversion – Near-Term Risk to BoE Pricing

    Henry Occleston

    Last week we warned against the premature pricing of a Fed dovish pivot, and why UST 2s10s should continue to significantly invert.

  2. Rates Weekly: Fade Post CPI Rates Bid

    Henry Occleston

    US CPI surprised to the downside on the back of strong deflation in used car prices. The surprise has nevertheless driven a generic bid across the rates complex.

  3. Rates Weekly: 3 Reasons for Entering US 2s10s Flattener

    Bilal Hafeez

    The Fed continues to fight against the markets hope of an early end to the Fed hiking cycle. Markets are now pricing a terminal Fed rate of almost 5.25%.

  1. Rates Weekly: Markets Misplaced on US Inflation Outlook

    Bilal Hafeez

    Markets are besotted by peak inflation and the associated Federal Reserve (Fed) pivot. The thinking goes that headline US CPI peaked in June at 9.1%...

  2. Rates Weekly: The Market Has A Collateral Problem

    Bilal Hafeez

    The UK’s bond gyrations should provide a warning shot to markets – collateral could be the battleground for the next financial market crisis.

  3. Rates Weekly: How High Could Bund Yields Go?

    Henry Occleston

    Our expectation for a hawkish ECB pivot has now largely born out. However, we also expected them to look to suppress yields more. Instead, discussions of QT are gaining momentum.

Rates Weekly: Growth, Not Inflation, Driving US 10y

Bilal Hafeez

Our fundamental view is that the Fed will hike more than people think, and so we think front-end yields have further upside.

Rates Weekly: A 300 Year Take on UK Rates

Bilal Hafeez

Is it over? The surge in UK yields has been relentless over the past week. We think commentators have overstated the fiscal stimulus implications of the mini-budget...

  1. Rates Weekly: Curve Trades Around the Fed and BoE

    Henry Occleston

    The Fed hiked 75bp, their new dot-plots were even more hawkish than Dominique had expected (125bp of hikes to YE).

  2. Rates Weekly: Why Is Japanese Inflation So Low?

    Bilal Hafeez

    The Bank of Japan meets next week and there is some speculation that they could lift the upper bound of their yield curve control (YCC) policy.

  3. Global Rates Weekly: Position for the BoE Pivot

    Henry Occleston

    UK PM Truss’ new fiscal policy will suppress inflation in the short-term. Its effect, further out, is likely to be modest, sufficient only to send medium-term inflation towards 2%.

Global Rates Weekly: EGB Flattening into Hawkish ECB

Henry Occleston

ECB tone is becoming more hawkish, yet the market continues to anchor its terminal rate within the neutral range (1-2%).

Global Rates Weekly: How High Can the ECB Hike

Henry Occleston

ECB tone is becoming more hawkish. Market pricing of 200bp of hikes seems reasonable at the moment.

  1. Global Rates Weekly: Who Is Buying US Treasuries?

    Bilal Hafeez

    US 10y yield reached a high of 3.48% on 14 June, and since then has struggled to stay above 3%. Our take has long been that the market is underpricing...

  2. Global Rates Weekly: Too Early to Call the End of US Inflation

    Henry Occleston

    Thursday’s July US CPI release saw a surprise pause in the growth of the CPI index. ‘Flat inflation on the month’ - a headline punchy enough for US President Joe Biden to quickly jump on.

  3. Global Rates Weekly: BoE Hikes 50bp, But Provides a Strongly Dovish Outlook

    Henry Occleston

    The BoE hiked by 50bp, the details of the MPR, however, were extremely dovish. While the path for QT was not as heavy as we had expected, the MPC seems adamant that it not be derailed.

Global Rates Weekly: History Suggests Market Is Wrong to Price Fed Cuts

Bilal Hafeez

The market is pricing the Fed to be close to the end of its hiking cycle. 100bps of hikes are priced by the end of this year followed by cuts in 2023.

Rates Weekly: ECB Exits NIRP – But Not Necessarily a Hawkish Outturn

Henry Occleston

The ECB hiked 50bp, above our expectation of 25bp, but did not follow through with more hawkish rhetoric. Lagarde instead focused on a front-loading, but did not change to terminal policy rate.

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