Europe Giveth, But Today is More About The Taketh
Yesterday’s natural impulse for the domestic bond market would simply have been to move toward higher rates due to a raft of upbeat economic data in the morning. While the data did indeed push yields higher, European trading helped to push back due a favorable reaction to the comments delivered with the ECB announcement. The shoe is on the other foot today after an uptick in French inflation and hawkish comments from an ECB official (and perhaps just a tradeflow-driven correction to yesterday’s EU bond market gains). In plainer English, EU bond yields spiked overnight and pulled US yields along for the ride.