European Rates and Economics Daily

RBC reports on a market stalemate driven by US-Iran tensions and weak Chinese data, recommending tactical rates trades like selling Euribor straddles and US-EUR spread wideners.

Key Takeaways

• 1.Geopolitical tensions in the Middle East and weak Chinese economic data are driving a market stalemate, keeping oil prices elevated and putting upward pressure on bond yields.
• 2.The sharp bearish front-end re-pricing in European rates is likely over, but there is no immediate catalyst for a bullish reversal, favoring tactical sideways-market trades.
• 3.UK political uncertainty is impacting Gilts and SONIA forwards, though the BoE is unlikely to react to fiscal shifts until concrete policies are announced.

Table of Contents

• Weekend news
• Data and events
• Trading Tactically – How to trade the status-quo?
• Macro Minutes
• RBC RV Quadrant
• Sales Literature and Market Commentary Disclaimer
• Disclaimer for Central Bank A.I. Sight™
• Disclaimer for OTC Derivatives
• Sales Note Disclosures Under the Market Abuse Regime

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