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Daily outlook for global fixed income markets

Quotes from Danske Bank:

-The minutes from the January FOMC meeting had a dovish twist as many members were inclined to keep the fed funds rate at the lower bound for longer, citing weak inflation and other risks. The US curve steepened as rates declined more in the 2-5y segment than on the rest of the curve.

-Now, focus will turn to the 'Humphrey Hawkins' Testimony next Tuesday where Janet Yellen will have the opportunity to give her assessment of the current mix of a strong labour market and subdued inflation.

-We have a busy day in the primary market today. Spain is printing EUR3.5-4.5bn in the Oct-17 and the Apr-25. Spain has been underperforming peers in the recent rally and we see value in going long 5-10Y Spain at current levels.

-The Spanish economy is booming, Spain is set to benefit more than Italy from ECB QE and there is still a long time to go before the autumn election in Spain. France is tapping EUR7.5-8.5bn in the Oct-17, the Oct-19 and the May-20 plus EUR1-2bn in the Mar-25 linker.

 

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