[MARKET ANALYSIS] Fixed income firmer as energy falters, dragging yields lower

Newsquawk StaffPublished 25 Mar 2026, 10:32 UTC

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10:15

Coast-to-sea cruise missiles of the Iranian army targeted the US aircraft carrier Lincoln, according to CGTN Europe citing reports from Iran [Desk on the look out for further clarity/reports]

10:13

India government official says it is not aware of any Iranian LPG cargo headed to India

10:12

[MARKET ANALYSIS] Fixed income firmer as energy falters, dragging yields lower

10:08

Italy's Confindustria cuts 2026 GDP forecast to 0.5% (prev. 0.7%)

10:05

Italy sells EUR 2.0bln vs exp. EUR 1.75-2.0bln 2.20% 2028 BTP & EUR 2.0bln vs exp. EUR 1.5-2.0bln 1.10% 2031, 1.80% 2036 BTPei

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A bullish start to the day as the progress towards a ceasefire weighs on the energy space, allowing yields to ease from highs and in turn underpinning the fixed income space.
Thus far, USTs have been as high as 110-30 with gains of 17 ticks at best. However, the benchmark remains shy of the WTD peak at 1110-04+ and by extension well off recent peaks.
For the most part, today will be focused on how the talks develop and how many of the 15 points Iran is willing to accept and the US is willing to compromise on.
Elsewhere, EGBs and Gilts are bid, with gains of 43 and 53 ticks respectively, but off best levels by around 20 and 40 ticks.
Bunds unreactive to remarks from ECB's Lagarde and Lane, which largely stuck to the script from last week. Elsewhere, the March German Ifo series was better than expected, though the readings did decline from the prior, with the exception of the Current Assessment. However, the series clearly shows that the economy is feeling the impact of the Middle East situation, but participants are yet to determine if the crisis is a lasting one or not, in terms of its economic impact. In short, further evidence of stagflation in the EZ.
For Gilts, the bias was bullish given the above. However, the February CPI series marginally added to the stagflationary diagnosis the UK economy is currently subject to. Nonetheless, Gilts opened higher by around 35 ticks before climbing to an 88.62 peak with gains of 99 ticks at best. Ahead, BoE's Greene may weigh in on the UK's precarious economic situation.

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