FRANCE AUCTION PREVIEW: 10/12-year OATs
Aug-04 08:07
- On offer today: E5-6bln of OATs
- 2.00% Nov-32 OAT (ISIN: FR001400BKZ3)
- 1.25% May-34 OAT (ISIN: FR0013313582)
- Market colour: 10/12-year OAT yields have fallen since the beginning of July by approx. 55 and 51bp respectively to stand around 1.426% and 1.561% currently. This is just shy of 100bp lower than the June 16 high of 2.581% for the 1.25% May-34 OAT.
- 10-year OAT spreads to the Bund have narrowed since the beginning of July, by around 7bp to around 62bp. The 12-year OAT spread to the 0% May-35 Bund has widened around 7bp since the beginning of May, seeing a brief spike to around 65bp and currently hovering around 59bp.
- Timing: Results will be available shortly after the auction closes at 0950 BST / 1050 CEST.
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EUR: EURUSD is extending losses
Jul-05 08:04
- EURUSD extends losses, with the lower revision in French Services PMIs.
- Broader base USD bid is also a driver.
- EUR is at session low against CHF, GBP, and CAD.
- The EUR still traded in the green versus the SEK, after the Swedbank Services PMI miss versus last, earlier.
- Worst performer against the EUR is the AUD, down 0.31%.
GILT AUCTION PREVIEW: 1.25% Jul-51
Jul-05 07:44
- The DMO will come to the market this morning to offer GBP2.0bln of the 30-year 1.25% Jul-51 gilt.
- This will be the seventh auction of the gilt (which was originally launched via syndication in April 2021).
- The auction size of GBP2.0bln is a bit larger than seen recently, with the last three auctions being sized at GBP1.5bln, GBP1.5bln and GBP1.75bln respectively.
- Bid-to-covers have remained strong, ranging from 2.05-2.91x, with the 2.91x seen at the last auction on 18 May.
- Tails have been move variable, ranging from 0.2-1.1bp, but again the 18 May auction was strong with a 0.2bp tail.
- UK 30-year yields have been on a bit of a rollercoaster recently, hitting a high of just below 2.90% on 21 June and moving as low as 2.39% on Friday before recovering somewhat to 2.58% at the time of writing.
- Timing: Results will be available shortly after the auction closes at 10:00BST with a further GBP500mln available to successful bidders through the PAOF.
USD: AUDUSD extends losses
Jul-05 07:44
- AUDUSD extends losses, now down 0.76%, and the pair is now eyeing yesterday low at 0.6794.
- A clear break through the latter opens to 0.6764, the July low and the lowest print since June 2020,
