RUSSIA: Axios Report US Secretly Drafting New Plan to End Ukraine War
Nov-19 08:31
- Axios report that the Trump administration has been secretly working in consultation with Russia to draft a new plan to end the war in Ukraine. A top Russian official told Axios he's optimistic about the plan but it's not yet clear how Ukraine and its European backers will feel about it, as it is unclear how the plan approaches contentious issues such as territorial control in eastern Ukraine.
- Local newspaper RBC report that the volume of foreign currency assets held by Russians reached a record high – totalling $269bn at the end of September, up $10bn since the beginning of the year.
- Kommersant report that the share of locally assembled Chinese brand cars sold in Russia doubled year-on-year in October, reaching 43%. By the end of December, that figure could increase to 50%.
- President Vladimir Putin and Egyptian President Abdel-Fattah El-Sisi will hold a video conference on a nuclear power plant project in Egypt. Weekly inflation and October PPI figures will be published at 16:00GMT/19:00 local time. Meanwhile, the Bank of Russia will publish a report on consumer inflation and its latest estimate of trend inflation.
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BUNDS: Cash Basis Trade
Oct-20 08:25
Bund Basis trade, suggest Cash seller:
- RXZ5 7k at 129.83.
GILTS: Steady Open; Trend In 10-year Yields Still To The Upside
Oct-20 08:22
A fairly steady open for Gilts ahead of an important week for UK data. Futures are -4 ticks at 92.42. A short-term bull cycle in futures remains intact though, with initial resistance at Friday’s high of 93.17.
- Yields are up to 1bp higher across the curve. 10-year yields are currently 4.536%, down from this month’s 4.758% high. Despite this month’s fall in yields, the medium-term trend for the 10-year is still to the upside. Initial support is the April 7 low at 4.363%, which shields trendline support drawn from the November 2022 low at 4.232% today.
- See MNI’s Tech Trend Monitor for more, which also includes charts on the 30-year Gilt yield.
- Fiscal policy remains a key focus for the Gilt market ahead of the Nov 26th budget. The main fiscal headlines from the weekend have suggested that VAT may be removed from energy bills.
- September public sector finance data is due on Tuesday. After correcting for a VAT error in last month’s release, PSNB is currently tracking GBP9.4bln below the OBR’s forecast year-to-date.
- This release, alongside Wednesday’s CPI report (important for the near-term BOE outlook) will feed into the OBR’s Round 3 forecast on October 31 ( see here for more).
Figure 1: 10-year Gilt Yields (Source: Bloomberg Finance L.P)
FOREX: FX OPTION EXPIRY
Oct-20 08:14
Of note:
USDJPY ~2bn at 150.00/150.05.
EURUSD ~1bn at 1.1700 (tue).
NZDUSD 1.1bn at 0.5700 (wed).
AUDUSD 1.49bn at 0.6450 (fri).
- EURUSD: 1.1645 (665mln), 1.1650 (331mln), 1.1670 (211mln), 1.1700 (346mln), 1.1705 (206mln), 1.1715 (740mln).
- USDJPY: 150.00 (1.28bn), 150.05 (823mln), 150.25 (600mln), 150.50 (355mln), 151.00 (779mln), 151.70 (1.1bn).
- USDCAD: 1.4000 (718mln).
- AUDUSD: 0.6500 (340mln).
- AUDNZD: 1.1325 (400mln).
