Fixed Income: contrasting fortunes

Bunds remain bid or at least underpinned as Germany’s President issues a plea to all parties to reconsider their positions in an effort to avoid going back to the polls. However, comments ahead of his statement from the various political entities did not suggest a willingness to soften stances and find any common ground – hence the Eur remains top heavy below 1.1800 vs the Usd and 0.8900 vs the Gbp. Gilts also keeping their head above water, just, but US Treasuries have come under some pressure since the open, and long end led it seems in a change to the recent trend. Some are alluding to corp supply and a Starbucks 2-tranche deal (3 and 30 year), but there are a few others also in the pipeline. Eurodollar futures have also succumbed to some selling and Dec17 at 98.4550 in a hefty clip, perhaps on some reflection of a more hawkish spin on Fed hiking by GS that is looking for 4 next year vs 3 in the FOMC dot plots and 2 at the more dovish end of the expected range.

20 Nov 2017 - 14:00- - Source: ransquawk

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