SGOV - Rates Spark: Buffeted By Ongoing Sequence Of Macro Data
2024-07-31 06:55:00 ET
Summary
- Eurozone data continues to challenge the European Central Bank, with German economic contraction and sticky CPI complicating matters.
- Meanwhile, the Bund-UST 10Y spread has widened further due to lower Bund yields amid deteriorating risk sentiment.
- US data this week is refusing to move into a panic mode where rate cuts are demanded immediately.
By Padhraic Garvey, CFA , Michiel Tukker , Benjamin Schroeder
Mixed eurozone data highlights challenge for ECB
Eurozone data has not been giving the ECB an easy time, and Tuesday’s data is no different. Germany is clearly the problem child here, with an economic contraction in the second quarter, whilst CPI and wage growth refuse to give in. Markets are struggling to decide on a direction and instead seem to resort to US data instead. The GDP and inflation readings did little to move the 2Y EUR swap rate, whereas the disappointing US house price index seemed to trigger the dip lower on the day....
Rates Spark: Buffeted By Ongoing Sequence Of Macro Data