Rates Spark: Key data tests to bullish sentiment coming up | articles

Rates and inflation 130524

In the eurozone we will be looking at outcomes from the German ZEW survey. Germany’s poor economic performance continues to drag down eurozone growth and thus any upside surprise beyond the improvement already pencilled in from consensus would nudge yields higher. UK weekly earnings data in the morning will be watched by the BoE and could move rates. In the US core PPI is seen coming in at an unchanged 0.2% month-on-month, though there are some calls for an increase to 0.3% given that we had seen the price components of the ISMs ticking higher. Also watch the NFIB’s small business optimism and its employment component. Fed Chair Powell will be speaking today at an event alongside the ECB’s Knot. From the ECB, Schnabel is also scheduled to deliver a speech on “setting the course for competitiveness and growth”.

In terms of issuance, the EU has mandated a new 30y bond via syndication which should be Tuesday’s business and is estimated to raise €7-8bn. A syndication by Italy for new 12y green BTPs is expected to raise €6bn. Furthermore, the Netherlands will auction €2bn for 5y DSLs, Germany €5bn of 2y Schatz, and the UK a £0.6bn 50y Gilt linker. 

This article was originally published by a think.ing.com

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