FEEU News and Press, Barclays ETN FI Enhanced Europe 50 ETN From 09/02/21

We doubt the drivers behind the narrowing of USD-EUR rates differential will persist: supply will swing the other way ahead, and overly hawkish ECB comments sow the seeds of a mini-tantrum. We're at a crossroads on many fronts. Direction usually comes from the US, but not always. ...

ECB hawks are making the case for a reduction in PEPP purchases in 4Q, and for less monetary support generally. If there is disagreement, we’ll find out today or tomorrow. We doubt EUR rates can withstand both ECB and Fed tapering this year at current valuations. For ...

In his speech on Friday, Fed Chair Jerome Powell stressed that inflationary pressures are cooling and getting closer to the Fed’s 2% target rate. Powell also acknowledged that some inflation is a “cause for concern” and implied that higher prices could be more permane...

The US front end maintains a magnetic hold, pulling short rates down. A non-committal Fed puts the focus squarely on Friday’s jobs report. September tapering may yet happen, but US Treasuries were allowed a pause in their sell-off. We expect supply to be a more potent drive...

Equities wobbled a bit midway through August, but they have since regained their mojo, all but confirming that the bull market in equities remains strong and unchallenged. A reduction in the pace of QE is coming, in both the US and Europe. Indeed, the pace of asset purchases already h...

Now that Jackson Hole is over, the focus shifts back onto the economic recovery. The euro area economy is ticking along nicely. Data from the UK this week showed that, despite all restrictions being lifted, the economy continues to face headwinds because of supply and labour short...

A softening of sentiment indicators comes as rates already sit close to the bottom of their recent range. Positioning might push them lower still, but EUR rates, in particular, are already consistent with more central bank support next year. The belly of the US curve trades cheap,...

Any disappointment in key US data today is likely to see a larger reaction than a consensus beat. Markets are primed for hints of further deceleration, sentiment already dampened by the spreading delta variant and geopolitics. More concrete hints on the Fed taper will be needed fo...

We may well have seen the trough in both USD and EUR rates this summer, but we expect USD rates will rise much faster from here. With Fed tapering coming into view, the divergence with ECB QE policy will become more obvious. There is divergence on the US front end too, as bills re...

Hawkish soundbites and positive economic news dominate for the US, despite global growth concerns. Officials talking about tapering within a few months should help focus minds at the long end of the curve, despite a supportive technical backdrop for bonds. A glut of cash remains i...