ING Rates Spark: Long-End Treasury Risks, ECB Conviction, and UK Data Tests

Benign US CPI data has reduced September Fed hike pricing to ~30%, but long-end US Treasuries remain exposed to higher real yields and Treasury supply pressures. Meanwhile, European markets remain locked on a September ECB hike, and UK Gilt pricing faces a heavy domestic data slate.

Key Takeaways

• 1.Front-end US rate expectations have eased following benign CPI data, but long-end 10-year Treasury yields remain vulnerable to upward pressure from higher real yields, fiscal supply expansion, and yen dynamics.
• 2.Markets and ING maintain high conviction for an ECB rate hike in September, with high energy prices and supply risks compounding inflationary pressures in the Eurozone.
• 3.Sterling markets appear overly hawkish with 50bp of policy tightening priced through mid-next year, setting up UK Gilts for tests from upcoming wage, unemployment, and CPI releases.

Table of Contents

• Rates Spark: Long-end risks, ECB conviction and UK data tests
• Treasuries: A vulnerable long end
• Bunds: Very little to distract markets from a September hike
• Gilts: Continued hawkish pricing to be tested by data inputs
• Monday’s events and market view
• Author
• Disclaimer

Report data

Despite benign US CPI data, we think long-end rates remain vulnerable to the upside on higher real yields and a deteriorating fiscal position

Reports in this series

Rates Spark is shown in chronological order through this edition, published on August 17, 2026.

Part of the Rates Spark series — view all 32 editions

Looking for the latest edition? ING Think rates spark so how bad could this whole thing get (Sep 2, 2026)

1. May 14ING-Think-rates-spark-the-evaporation-of-real-yields
2. May 15ING-Think-rates-spark-flip-the-gaze-from-china-back-to-iran
3. May 19ING-Think-rates-markets-have-shifted-to-a-broader-inflation-impact
4. May 20ING-Think-rates-spark-still-exposed
5. May 22ING-Think-rates-spark-differences-brought-into-sharper-relief
6. May 27ING-Think-rates-spark-up-and-down-with-oil
7. May 28ING-Think-rates-spark-plenty-of-supply-as-we-approach-summer
8. May 29ING-Think-rates-spark-watch-inflation-expectations-drift-higher
9. Jun 3ING-Think-rates-spark-the-real-deal
10. Jun 4ING-Think-rates-spark-spread-exposures
11. Jun 10ING-Think-rates-spark-oil-losing-control
12. Jun 11ING-Think-rates-spark-bracing-for-a-hawkish-ecb
13. Jun 12ING-Think-rates-spark-oil-still-key-to-ecb-outlook
14. Jun 15ING-Think-rates-spark-the-damage-has-been-done
15. Jun 23ING-Think-rates-spark-gilts-dont-like-political-uncertainty
16. Jun 24ING-Think-rates-spark-bonds-back-to-hedging-market-risks
17. Jun 25ING-Think-rates-spark-more-repricing-risk-at-front-end
18. Jun 30ING-Think-rates-spark-too-early-for-the-doves
19. Jul 1ING-Think-rates-spark-uk-political-risk-closely-tied-to-inflation-outlook
20. Jul 3ING-Think-rates-spark-resumed-steepening-impulse
21. Jul 7ING-Think-rates-spark-potential-relief-for-gilts-amid-a-bearish-bias
22. Jul 8ING-Think-rates-spark-another-push-higher-in-real-rates
23. Jul 10ING-Think-rates-spark-markets-looking-through-geopolitical-risks
24. Jul 15ING-Think-rates-spark-eur-rates-cannot-follow-a-dovish-us

Document Preview

Page 1 of 3

Subscribe for full accessCreate free account