[MARKET ANALYSIS] USTs caught between CPI and Fed speak, Bunds soft

Newsquawk Staff · 15 Jul 2026, 10:00 UTC

USTs remain contained, caught between CPI and Warsh. Bunds lower on energy, but off worst levels despite a sharp but ultimately short-lived decline in the early morning. Gilts opened on the backfoot, given energy.
USTs flat in a narrow 108-25+ to 108-31+ band, fresh catalysts light. Commentary remains focused on June’s dovish CPI report and the subsequent hawkish Fed testimony from Chair Warsh. Today, we get more insight on both points via Warsh’s Senate testimony and US PPI for June. Additionally, Fed’s Williams (voter) is on the docket.
Bunds lower by around 20 ticks, but are a similar amount clear of the 124.79 trough. A base that printed in a bout of somewhat short-lived bout of pressure this morning. No obvious catalyst behind that, though it did occur in tandem with modest DAX and EUR downside. Ongoing focus on pension reform may have contributed, given reporting earlier in Politico that suggested pension points could be reduced in some scenarios, saving multiple billions; though, the debate continues and won’t be resolved this week.
Alternatively, or additionally, the German Finance Ministry outlined that some EUR 13bln or energy-related relief is planned for 2027, funding for that to be sourced from the climate relief package.
Gilts opened lower by 16 ticks and have since moved lower to an 86.89 base, holding above the 86.87 and 86.42 lows from the last two sessions. Pressure the typical underperformance seen in Gilts when energy leads. No real relief from reports, such as the FT, suggesting that Miliband has lost the race to be Chancellor; though, outlets make clear that no decision has been made yet, ahead of Burnham becoming PM this weekend.

What our latest note said

EU Market Open, 22 Oct, 05:43 UTC · what it led with

APAC stocks were pressured and extended on losses throughout the session as AI and semiconductor names were sold, despite the gains on Wall Street.
The Hang Seng and KOSPI led the declines, while the BoK held rates as expected.

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