EGBS: 10-year BTP/Bund Spread Ignoring Pullback In Euro Equities
Oct-29 15:43
This afternoon’s pullback in European equity futures has not spilt over into the 10-year BTP/Bund spread. A stronger-than-expected set of Italian GDP data tomorrow could set the stage for a fresh round of tightening, with the 70bp figure the next downside target.
- The spread has been steadily grinding lower since yesterday morning, now at a fresh year-to-date (and multi-year) low of 76bps.
- Note that EUR 3m10y vol has also moved to its lowest since Q4 2021, fully unwinding the modest uptick seen in the first two weeks of October. BTPs remain a popular vehicle for carry trades, which are favoured in lower vol environments.
- Note that our latest Europe Pi publication saw BTP futures remain in their habitual “very long” territory. See here for more: https://media.marketnews.com/MNI_P28102025_e9a1a7977a.pdf
- Consensus sees Italian Q3 flash GDP at 0.1% Q/Q (vs -0.1% prior). The September unemployment rate is also due tomorrow, with analysts expecting an unchanged reading of 6.0%.
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US DATA: BLS's Shutdown Plan Confirms Key Data Wouldn't Be Published
Sep-29 15:37
The Bureau of Labor Statistics' key economic releases would be postponed in the event of a government shutdown, per the Department of Labor's plan for such an event - PDF link.
- "BLS will suspend all operations. Economic data that are scheduled to be released during the lapse will not be released. All active data collection activities for BLS surveys will cease. The BLS website will not be updated with new content or restored in the event of a technical failure during a lapse."
- Furthermore: "The releases of economic data will likely be delayed if a lapse is prolonged....A reduction in quality of data collected might impact the quality of future estimates produced."
- This was largely expected - at least for the key BLS data points in the next couple of weeks, namely the September employment report (due out this Friday Oct 3) and the September CPI report (due out Weds Oct 15)), as well as PPI (Oct 16). The shutdown would begin at midnight on Wednesday October 1 unless agreement is reached on government funding.
- It was unclear whether the weekly jobless claims reports would still be published, however, since while they are compiled and released by the BLS, they use state-by-state data and were published in 2013 during the last full federal government shutdown.
FED: US TSY 26W BILL AUCTION: HIGH 3.715%(ALLOT 61.66%)
Sep-29 15:32
- US TSY 26W BILL AUCTION: HIGH 3.715%(ALLOT 61.66%)
- US TSY 26W BILL AUCTION: DEALERS TAKE 25.38% OF COMPETITIVES
- US TSY 26W BILL AUCTION: DIRECTS TAKE 8.35% OF COMPETITIVES
- US TSY 26W BILL AUCTION: INDIRECTS TAKE 66.27% OF COMPETITIVES
- US TSY 26W BILL AUCTION: BID/CVR 3.00
FED: US TSY 13W BILL AUCTION: HIGH 3.860%(ALLOT 70.07%)
Sep-29 15:32
- US TSY 13W BILL AUCTION: HIGH 3.860%(ALLOT 70.07%)
- US TSY 13W BILL AUCTION: DEALERS TAKE 34.19% OF COMPETITIVES
- US TSY 13W BILL AUCTION: DIRECTS TAKE 7.01% OF COMPETITIVES
- US TSY 13W BILL AUCTION: INDIRECTS TAKE 58.80% OF COMPETITIVES
- US TSY 13W BILL AUCTION: BID/CVR 2.74
