Rates Spark: Data Doesn't Change An Uncertain Backdrop

2025-04-30 03:35:00 ET

Summary

• This week's first data releases did not change the underlying narrative for rates markets, in which (geo)political uncertainty dominates.
• We do see markets calming down, with implied rates volatility for euro rates back to the levels of January.
• While we think euro rates should be higher from a structural perspective, for now, we remain bullish given the fragile state of global risk sentiment.

By Michiel Tukker

Data doesn’t change narrative of great uncertainty ahead

The first series of important data of the week is in, but euro rates remained unfazed by the numbers, and rightly so. First Spanish GDP numbers came in slightly lower, but inflation was on the high side versus consensus. The European Central Bank's consumer confidence index remained right where it was, and no tariff shock could be detected yet. Later, we did see some disappointing US jobs and confidence data, helping the short end of the US curve lower by a tad....

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