Rates Spark: Kicking Off A Data-Driven Week

2025-04-29 04:35:00 ET

Summary

• Euro markets will be watching domestic and US data this week for signs of deterioration in the aftermath of Liberation Day.
• The European Central Bank (ECB) is allegedly looking into simplifying banking regulation. We'll be following this closely in case banks' balance sheet capacity is impacted.
• In the US, the discussions on excluding Treasuries from the leverage ratio calculations seemed to have had a material impact on the spread between government bonds and swaps. With the ECB regularly looking to ensure a level playing field, this may be an area of interest.

By Michiel Tukker

Euro rates will focus on domestic data but cannot ignore US

Euro rate markets are keenly awaiting economic data in the coming days to validate the more dovish sentiment we've seen lately. Growth concerns are pushing inflation risks to the background, and the eurozone consumer confidence index may get more attention than Spain’s inflation numbers. Having said that, if we were to get considerable upside inflation surprises this week, then the focus may be forced into a more balanced stance again....

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