Fixed Income Markets: The Week Ahead

Fixed Income Markets: The Week Ahead

Macro Digest
Althea Spinozzi

Head of Fixed Income Strategy

This week we expect market sentiment to depend on news concerning President Trump's health and progress regarding the fiscal stimulus package. The main questions are: (1) will Trump be able to run the presidential campaign? (2) will the stimulus package be agreed upon or there might be further delays?

Investors will most likely not want to take a strong market position as it is not clear if the President's symptoms will become more severe. On Friday, the CFTC Commitment of Traders showed that traders' short position in bond futures is the biggest ever on record. Ultra and long maturities were the most sold, indicating that the market expects a fast bear steepener. This sentiment can translate in lower participation in this week's 30-year treasury auction.

We have a week rich of federal reserve speeches and government bond auctions where the US government will look to sell 3, 10 and 30 year Treasuries. It will be crucial to monitor whether treasuries demand softens up as bearish sentiment can leak to the corporate bond space hindering the pipeline in the primary market.

In Europe, investors will try to wrap their head around weaker than expected consumer prices which were released last week. If the ECB decides to increase stimulus, we might see sovereigns prices rising fast. The country that will most likely benefit from it, it's Italy as more aid is necessary to fight long term deflation.

5th of October

  • Eurozone: Markit composite PMI; investor confidence; retail sales
  • United Kingdom: official reserves changes; Markit services and composite PMI
  • USA: Services PMI; ISM nonmanufacturing; Chicago Fed President Charles Evans; Atlanta Fed President Raphael Bostic

 6th of October

  • Eurozone: ECB President Lagarde speaks
  •  UK government auction: to sell GBP 2bn of 2049 bonds
  • Germany government auction: to sell EUR 500 mil of 2030 linkers
  • USA: JOLTS; Jerome Powell speaks at National Association for Business Economics
  • USA government auction: to sell USD 52bn 3-year notes

 7th of October

  • Eurozone: ECB President Lagarde speaks in Paris
  • United Kingdom: house price index; unit labor costs; output per hour.
  • UK government auctions: to sell GBP 2.5bm of 2030 bonds; to sell GBP 750mil of 2041 linkers
  • USA: Fed minutes; Consumer Credit. Several Fed’s speaker from Atlanta, New York, Boston, Chigago and Minneapolis.
  • USA government auction: to sell USD 35bn 10-year notes reopening.

 8th of October:

  • USA Initial jobless Claims.
  • USA government auction: to sell USD 23bn of 30-year bonds reopening.

9th of October

  • United Kingdom: GDP figures; industrial production.
  • USA: wholesale trade.

Quarterly Outlook

01 /

  • Upending the global order at blinding speed

    Quarterly Outlook

    Upending the global order at blinding speed

    John J. Hardy

    Global Head of Macro Strategy

    We are witnessing a once-in-a-lifetime shredding of the global order. As the new order takes shape, ...
  • Equity outlook: The high cost of global fragmentation for US portfolios

    Quarterly Outlook

    Equity outlook: The high cost of global fragmentation for US portfolios

    Charu Chanana

    Chief Investment Strategist

  • Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Quarterly Outlook

    Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Jacob Falkencrone

    Global Head of Investment Strategy

  • Commodity Outlook: Commodities rally despite global uncertainty

    Quarterly Outlook

    Commodity Outlook: Commodities rally despite global uncertainty

    Ole Hansen

    Head of Commodity Strategy

  • Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    Quarterly Outlook

    Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    John J. Hardy

    Global Head of Macro Strategy

  • Equity Outlook: The ride just got rougher

    Quarterly Outlook

    Equity Outlook: The ride just got rougher

    Charu Chanana

    Chief Investment Strategist

  • China Outlook: The choice between retaliation or de-escalation

    Quarterly Outlook

    China Outlook: The choice between retaliation or de-escalation

    Charu Chanana

    Chief Investment Strategist

  • Commodity Outlook: A bumpy road ahead calls for diversification

    Quarterly Outlook

    Commodity Outlook: A bumpy road ahead calls for diversification

    Ole Hansen

    Head of Commodity Strategy

  • FX outlook: Tariffs drive USD strength, until...?

    Quarterly Outlook

    FX outlook: Tariffs drive USD strength, until...?

    John J. Hardy

    Global Head of Macro Strategy

  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy

The information on or via the website is provided to you by Saxo Bank (Switzerland) Ltd. (“Saxo Bank”) for educational and information purposes only. The information should not be construed as an offer or recommendation to enter into any transaction or any particular service, nor should the contents be construed as advice of any other kind, for example of a tax or legal nature.

All trading carries risk. Loses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money.

Saxo Bank does not guarantee the accuracy, completeness, or usefulness of any information provided and shall not be responsible for any errors or omissions or for any losses or damages resulting from the use of such information.

The content of this website represents marketing material and is not the result of financial analysis or research. It has therefore has not been prepared in accordance with directives designed to promote the independence of financial/investment research and is not subject to any prohibition on dealing ahead of the dissemination of financial/investment research.

Saxo Bank (Schweiz) AG
The Circle 38
CH-8058
Zürich-Flughafen
Switzerland

Contact Saxo

Select region

Switzerland
Switzerland

All trading carries risk. Losses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money. To help you understand the risks involved we have put together a general Risk Warning series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. The KIDs can be accessed within the trading platform. Please note that the full prospectus can be obtained free of charge from Saxo Bank (Switzerland) Ltd. or the issuer.

This website can be accessed worldwide however the information on the website is related to Saxo Bank (Switzerland) Ltd. All clients will directly engage with Saxo Bank (Switzerland) Ltd. and all client agreements will be entered into with Saxo Bank (Switzerland) Ltd. and thus governed by Swiss Law. 

The content of this website represents marketing material and has not been notified or submitted to any supervisory authority.

If you contact Saxo Bank (Switzerland) Ltd. or visit this website, you acknowledge and agree that any data that you transmit to Saxo Bank (Switzerland) Ltd., either through this website, by telephone or by any other means of communication (e.g. e-mail), may be collected or recorded and transferred to other Saxo Bank Group companies or third parties in Switzerland or abroad and may be stored or otherwise processed by them or Saxo Bank (Switzerland) Ltd. You release Saxo Bank (Switzerland) Ltd. from its obligations under Swiss banking and securities dealer secrecies and, to the extent permitted by law, data protection laws as well as other laws and obligations to protect privacy. Saxo Bank (Switzerland) Ltd. has implemented appropriate technical and organizational measures to protect data from unauthorized processing and disclosure and applies appropriate safeguards to guarantee adequate protection of such data.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.