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Downside correction in sovereign bonds continues ahead of ECB, Fed meetings


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The downside correction in global sovereign markets continue in the final run-up to the ECB and Federal Reserve meetings this week and the next respectively. Investors are trimming long speculative positions in sovereign bonds, as dovish expectations have certainly gone well ahead of what central banks would deliver at his months meetings. As such, the US 10-year yield recovered past the 1.70% mark, and the 10-year bund retreated past -0.55%.

[...]

Asian equities mostly gained on Wednesday, but stocks in mainland China remained on the back foot despite the Chinese governments dismissal of quotas and approvals for foreign investors. The latter move was interpreted as a sign of desperation and an increased need for cash as a result of mounting financial difficulties in China due to the unresolvable trade war with the US. On the other hand, it is unsure that the lifted quotas would have any positive impact on foreign capital inflows given that the $300 billion quota in place has been used up to a third only. International investors have an increasingly cautious approach to Chinese assets

Read the full LCG report

https://www.lcg.com/int/analysis-education/market-reports/articles/downside-correction-in-sovereign-bonds-continues-ahead-of-ecb-fed-meetings/

Opening calls

FTSE to open 24 points higher at 7292

DAX to open 90 points higher at 12335



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Ipek Ozkardeskaya is a senior analyst at MBAex with a solid experience in the financial industry. She has strong technical background in economics and quantitative finance. Previously, she worked as a senior market analyst in London Capital Group, FX strategist in Swissquote Bank and as a client sales executive at HSBC Private Bank in Geneva. She also developed quantitative models in automatic trading as part of BCV’s Structured Products team. Ipek has a Master’s degree in Financial Engineering & Risk Management and a Bachelor degree in Economics from University of Lausanne.
 
Contributing  author since 11/09/2017

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