[MARKET ANALYSIS] Fixed benchmarks are mixed, USTs await FOMC Minutes whilst Gilts gain post-CPI

Global fixed benchmarks are mixed this morning, though yields ultimately remain near recent multi-year highs as concerns surrounding geopolitical/fiscal remain. Price action today has been fairly rangebound given the lack of pertinent newsflow. The geopolitical environment remains tense, with President Trump continuing to threaten Iran; recent Iranian sources have rejected the White House’s claim that there have been direct negotiations between Iran and the US. USTs (+3+ ticks) currently holds towards the upper end of a 108-16 to 108-23 range. The docket is lacking for the remainder of the day, aside from the FOMC Minutes. It will be eyed to gauge hawkish sentiment among the wider FOMC, with markets currently leaning towards a hold in September. However, given recent soft US data, the Minutes could be looked through. Bunds (-2 ticks) are essentially flat and ultimately trading on either side of the unchanged mark. EZ HICP Final metrics were unrevised, with focus on a 10yr auction shortly. The GE 10yr (3.26%) remains elevated, but off recent peaks. Mizuho highlights that the timing of this auction is quite awkward given the recent steepening and challenging backdrop for duration. The firm states that a good auction could stabilise the long end. Gilts (+18 ticks) are outperforming this morning, taking lead from the region’s inflation report. Headline inflation rose from the prior (in-line with expectations), but much of the acceleration was attributed to Ofgem’s utility price hike. Dovish factors stem from a decent moderation in food inflation and cooling Services inflation (though mainly due to low air fares reading). Overall, the report will do little to shift the BoE away from its holding policy; ING expects the Bank to keep rates on hold for the remainder of the year, before delivering cuts in Spring 2027.