1118 GMT - Data that showed U.K. GDP growing 0.5% on month in February likely exaggerates the strength of the economy, UBS Global Wealth Management economist Maelle Quillevere says in a note. Broader indicators continue to paint a softer picture of underlying demand, and the outlook remains fragile, she says. Energy costs are expected to push inflation back up, delaying a return to the Bank of England's 2% target until next year. BOE Gov. Andrew Bailey has stressed the uncertainty around second-round effects and the pass-through to domestic demand, saying the bank will act on evidence of how the conflict in the middle east impacts the economy, Quillevere notes. "In other words, the risk of overtightening into a slowdown now appears to weigh more heavily than the risk of acting too late," she says. (edward.frank@wsj.com)

1112 GMT - The cost of insuring Hungary's sovereign debt against default falls to a multiyear low after the country elected a new leader, Peter Magyar, a week ago. Since the election, the prospects of unlocking frozen funds for Hungary by the European Union have increased, driving positive outlook on the country. Hungarian assets are expected to post improved performance due to the positive headlines after the elections, ING's Frantisek Taborsky says in a note. Hungary's five-year credit default swaps are down 21 basis points since the elections to 87bps in Monday morning trade, a multiyear low, S&P Global Market Intelligence data show. (miriam.mukuru@wsj.com)

1019 GMT - Credit spreads on euro-denominated credit are expected to widen in the second quarter due to concerns about AI disruption and private credit risk, UBS strategists say in a note. Spreads tightened last week due to prospects of de-escalation in the Middle East conflict before the U.S. and Iran relations deteriorated over the weekend. "Despite recent tightening, we continue to expect spreads to widen from here." Euro investment-grade credit spreads are forecast to peak at 100 basis points by the end of 2Q while euro high-yield credit spreads are expected to peak at 325bps, the strategists say. (miriam.mukuru@wsj.com)

0959 GMT - Euro credit default swaps, which provide protection against credit default, rise as investor sentiment deteriorates due to renewed tensions in the Middle East conflict. "The continuing blockade of [Iran's] ports over the weekend created a cloud of uncertainty over whether the next round of peace talks will go ahead," AJ Bell's Russ Mould says in a note. The iTraxx Europe Crossover index of euro high-yield credit default swaps rises 3 basis points to 279bps, S&P Global Market Intelligence data show. The iTraxx Europe Main index of euro investment-grade CDS climbs 1bp to 57bps. (miriam.mukuru@wsj.com)

0958 GMT - The European Central Bank is set to hold interest rates next week, but data between now and June will determine whether tightening becomes warranted, says Patrick Barbe, portfolio manager at Neuberger in a note. If core inflation settles arounFWhile fiscal stimulus plans are supportive in principle, but have yet to show up significantly in the data and are being offset by the Iran war's higher energy and commodity costs, Barbe says. Elsewhere, low natural-gas storage levels, fragile export demand, uncertainty around summer tourism all add to the complexity the ECB must navigate, he says. Investors point to about an 80% chance rates being left on hold next week, LSEG data show. (edward.frankl@wsj.com)

0956 GMT - Demand for U.S. dollar-denominated credit is expected to rise due to the assets' high yields, BNP Paribas' strategists say in a note. "Yields remain around the highest level since August 2025, which will help attract yield-buyers like life insurance and Asian investors, especially to the long-end," they say. Investor funds are expected to continue flowing into U.S. credit market, the strategists say. (miriam.mukuru@wsj.com)

0939 GMT - Credit spreads on euro-denominated credit are expected to widen in the second quarter due to concerns about AI disruption and private credit risk, UBS strategists say in a note. Spreads tightened last week due to prospects of de-escalation in the Middle East conflict before relations between the U.S. and Iran deteriorated over the weekend. "Despite recent tightening, we continue to expect spreads to widen from here," the strategists say. Euro investment-grade credit spreads are forecast to peak at 100 basis points by the end of the second quarter, while euro high-yield credit spreads are expected to peak at 325 basis points, they say. (miriam.mukuru@wsj.com)

0937 GMT - Issuance of new euro-denominated bank debt was strong last week, supported by solid demand, ABN Amro's Joost Beaumont and Shanawaz Bhimji say in a note. The new supply attracted strong order books, the strategists say. Nonetheless, new bond supply is likely to be slower this week due to doubts about the U.S.-Iran ceasefire deal, they say. Some European banks are in the black-out period which prohibits banks from issuing new securities, a factor likely to lead to lower bonds supply, the strategists say. (miriam.mukuru@wsj.com)

0934 GMT - Fresh U.K. political uncertainty could lead to further sterling falls, MUFG Bank's Lee Hardman says in a note. Prime Minister Keir Stamer is facing calls to resign after it emerged former U.K. ambassador to the U.S. Peter Mandelson failed the vetting process but was still approved for the job. Starmer is expected to address parliament at 1430 GMT. The developments have renewed speculation over a potential leadership challenge if the ruling Labour Party performs poorly in May's local elections, Hardman says. "So far the negative impact on the pound has been limited, but U.K. political developments have the potential to trigger a sharper selloff in the month ahead." The euro rises 0.1% to 0.8713 pounds. Sterling falls 0.2% to $1.3493. (renae.dyer@wsj.com)

0932 GMT - Geopolitical tensions and shifting inflation dynamics have introduced renewed volatility into fixed income markets, but economic and corporate fundamentals remain solid and investors should focus on that, Principal Asset Management's Mike Goosay says in a note. "U.S. growth continues to show resilience, corporate fundamentals are broadly stable, and credit markets are adjusting in an orderly fashion," the CIO and global head of fixed income says. "The path forward may be uneven, but the environment rewards investors who stay focused on fundamentals, maintain selectivity, and use volatility as an opportunity rather than a signal to step back," he says. (emese.bartha@wsj.com)

0931 GMT - U.S. Treasury yields and the dollar edge up as oil prices rise after the renewed closure of the Strait of Hormuz, adding to inflation concerns. The rapid shift in Iranian rhetoric about the Strait of Hormuz during the weekend and the U.S. seizure of an Iranian-flagged cargo vessel could leave markets on edge, says Exness' Krisada Yoonaisil in a note. Iran also signaled that it might not participate in a second round of negotiations. This could reinforce concerns over potential prolonged global energy-supply disruption, fueling inflation concerns and pushing Treasury yields higher, the financial markets strategist says. The 10-year Treasury yield rises 2.4bps to 4.267%, according to Tradeweb. The DXY dollar index rises 0.2% to 98.311. (emese.bartha@wsj.com)
source: https://www.tradingview.com/news/DJN_DN20260420002904:0/