MNI EXCLUSIVE: A Look At BOE Reserve Remuneration

Looking at German 10yr Yield reference 136.29.

• 2.400% = 135.37
• 2.450% = 134.79
• 2.500% = 134.21
• 2.557% = 133.55 (61.8% retrace 2008/2020 fall)

Bund has so far found some receiving interest after testing a 11yr high Yield yesterday and today.

Resistance in Future is still seen towards 136.98 initially.

Chart source: MNI/Bloomberg

Lead quarterly Dec'22 (EDZ2) at 95.14 (0.010) after latest 3M LIBOR set' climbs +0.02157 to new 14Y high of 3.94071% (+0.03200/wk).

• Modest bounce does little to change chances of 75bp hike at Nov FOMC, while the balance of Whites through Greens (EDH3-EDU5) +0.015-0.020, Blues-Golds (EDZ5-EDU7) steady to +0.015.
• Current inversions: Mar'23/Jun'23 -0.025; Dec'22/Red Dec'23 at -0.200, Mar'23/Red Mar'24 at -0.475, Jun'23/Red Jun'24 at -0.630. Inversion flattens out with Blue Dec'25/Mar'26 both trading 96.15.
• Monday's Columbus day bank holiday hampered liquidity w/ trade volume limited to Globex. Mixed flow as decent downside put insurance buying outpaced sporadic call trades as chances of 75bp rate hike in November continued to firm.