Morning Market Commentary

Goldman Sachs observes stable US rates amid geopolitical friction between the US and Iran and highlights active European sovereign bond issuance. Research suggests that the ECB might hike rates less aggressively than expected as tighter bank lending standards already dampen economic activity.

Key Takeaways

• 1.Tighter bank lending standards and financial conditions in the Euro area may substitute for some policy rate hikes, lowering output by an additional 0.1%.
• 2.US interest rates remained flat as initial optimism over a US-Iran peace deal faded when the US denied the Iranian draft framework.
• 3.European primary bond markets are active with significant syndications from Spain (EUR 13Bln 10y) and new mandates from Austria and Portugal.

Table of Contents

• EUROPE
• US
• European Daily: ECB—Could Tighter Financial Conditions and Lending Standards Replace Policy Rate Hikes?
• Chart of the Day
• Key GS Research

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