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Paul Manafort faces a money-laundering probe by the Manhattan U.S. attorney as Trump weighs who will run that office https://t.co/4wAxqbOhEO

(Bloomberg) -- German bunds flat into the close ahead of ECB decision Thursday, with 10y peripheral spreads tightening 2-3bps. Gilts drop after U.K. economy grew more than forecast in the third quarter, with waves of selling seen in Dec. 2017 short sterling.

• Treasuries weaken after 10y yield breaches key 2.42% level, prompting heavy selling of futures
  • Bunds futures dipped after Ifo, which saw a large buyer of new upside step in
• German 10y auction saw yields around day’s high, met with average demand, real bid/cover of 1.3x in line with prior and 0c tail
• Strategists bearishly positioned for ECB meeting, with Barclays, Deutsche Bank and JPMorgan recommending short 10y bunds
• Click here for a spreadsheet heat map of euro-area govt bond curves and spreads

To contact the reporter on this story: John Ainger in London at jainger@bloomberg.net To contact the editors responsible for this story: Ven Ram at vram1@bloomberg.net Keith Jenkins

(Bloomberg) -- If the Copom indicates that the Selic will fall below 7% level, which is not the most likely scenario, the signaling may have an impact on the exchange rate and the swap rates curve, Tony Volpon, an economist at UBS Brasil and former director of the Central Bank, says in a telephone interview.

• Long end of swaps curve is curve isn’t following BCB closely, as some people don’t believe rates can fall to 7% or 6.75% and stay there for a long time
• With lower carry trade, there has been some outflow, while there’s no inflow to counterbalance that move since political risk is high
  • Some investors are concerned with possibility of volatility increase during 2018, as it’s an election year
• BRL is disconnected from fundamentals, which include positive trade terms and economic recovery
  • Recent BRL weakness is not due to domestic fundamentals, it was a rather technical move
• NOTE: Access TOPLive to follow coverage of Brazil rate decision and analysts’ comments on Oct. 25 (in Portuguese). To create an alert, click here

Original Story: UBS/Volpon: Se BC apontar juro menor que 7%, pode impactar dólar To contact the translator on this story: Giulia Camillo in Sao Paulo at gcamillo@bloomberg.net Reporter on the original story: Josue Leonel in Sao Paulo at jleonel@bloomberg.net Editors responsible for the original story: Daniela Milanese at dmilanese@bloomberg.net Patricia Lara