22 Jan 2015
Pre-ECB profit taking seen in bonds – KBC
FXStreet (Barcelona) - The KBC Bank Research Team mentions that core German and the US bonds saw profit-taking ahead of the ECB meeting, while UK gilts outperformed post BOE minutes.
Key Quotes
“Global core bonds fell prey to pre-ECB meeting profit taking, initially in Germany, later on also in the US. The UK Gilts outperformed sharply following dovish BoE Minutes.”
“The Bank of Canada joined the easing mode of central bankers and unexpectedly cuts its official rate by 25 bps to 0.75%. We didn’t see a strong, reliable driver for the action in EMU, other than the pre-positioning for the ECB meeting.”
“In the US, UK and Canada, above-mentioned fundamentals did play a role. There were some comments (Nowotny) and rumours (WSJ) about certain aspects of QE, but one shouldn’t draw many conclusions from them.”
“The curve bear steepened in Germany/US with yield increases between 1.6 bps at the 2-yr and 8-9 bps at the 30-yr. In the intra-EMU bond market, yield spreads narrowed across the board with Greece outperforming.”
Key Quotes
“Global core bonds fell prey to pre-ECB meeting profit taking, initially in Germany, later on also in the US. The UK Gilts outperformed sharply following dovish BoE Minutes.”
“The Bank of Canada joined the easing mode of central bankers and unexpectedly cuts its official rate by 25 bps to 0.75%. We didn’t see a strong, reliable driver for the action in EMU, other than the pre-positioning for the ECB meeting.”
“In the US, UK and Canada, above-mentioned fundamentals did play a role. There were some comments (Nowotny) and rumours (WSJ) about certain aspects of QE, but one shouldn’t draw many conclusions from them.”
“The curve bear steepened in Germany/US with yield increases between 1.6 bps at the 2-yr and 8-9 bps at the 30-yr. In the intra-EMU bond market, yield spreads narrowed across the board with Greece outperforming.”