European Economics and Rates Strategy Daily

RBC provides a global macro update highlighting US tariff proposals, military strikes in the Middle East, and a slowdown in Australian GDP. The report tacticaly recommends going long on UK 10-year inflation break-evens ahead of a Gilt auction.

Key Takeaways

• 1.The US is proposing new tariffs of at least 10% (up to 12.5%) on imports from 60 countries over forced labor concerns.
• 2.Geopolitical tensions escalated as the US military launched 'self-defense' strikes on Iran following drone attacks in the Strait of Hormuz.
• 3.UK 10-year break-evens (BEs) look attractively cheap ahead of the IL35 Gilt auction, presenting a risk/reward opportunity to go long.

Table of Contents

• Overnight news
• Data and events
• Gilt market outlook - IL35 auction preview
• RBC growth and inflation forecasts
• RBC yield forecasts
• RBC RV Quadrant

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