Fixed Income Desks are on High Alert while Equities Remain Bullish

Published on 26 June 2023

William Spencer, multi-asset trader at UBS Asset Management, and Alexander Morris, chief investment officer and president at F/M Investments discuss how traders should be preparing for the week ahead as the summer lull could create higher volatility; how equities bullishness could continue and the opportunities to be found in UK Gilts and European Government bonds.

North America

  • Equities volumes are low for year-to-date levels and liquidity is poor. US investment grade spreads remain tight for the year. 
  • This week could be quieter as the summer lull hits and traders wrap up Q2. 
  • Data: US GDP Growth, Jobless Claims, consumer spending, and Core PCE on Thursday.
  • US axe data, which is within normal ranges, indicates a higher proportion of asks versus bids in credit.

Europe and the UK

  • European and UK equities volumes are very low for the year. Euro investment grade spreads remain tight for 2023.
  • Data: EU Economic Sentiment data, Consumer Credit numbers Thursday, and the Eurozone Inflation rate and Unemployment numbers on Friday.
  • EU axe data, which is within normal ranges, suggests a higher proportion of EU dealer asks Vs bids in credit.
  • GBP axe data, within normal ranges, suggests much higher net selling Vs buying of credit.