CHILE: BCCh President Costa Reiterates View Of Holding Present Rate Level
Apr-13 17:14
- While speaking with Bloomberg TV, Chile's central bank president, Rosanna Costa, has reiterated that the BCCh will not act hastily regarding monetary easing. She restated that the board will not cut rates until underlying inflation is on a clear downward trend.
- “We are worried about making hurried decisions and the fact that inflation and inflation expectations could bounce back,” Costa said while in Washington DC for the International Monetary Fund’s Spring Meetings. “That cost would be tremendously high.”
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US TSY FUTURES: BLOCK, Jun'23 5Y Sale
Mar-14 17:13
- -5,000 FVM3 108-17, sell through 108-17.75 post-time bid at 1305:47ET, 108-16 last (-27)
BONDS: EGBs-GILTS CASH CLOSE: Yields Continue To Bounce
Mar-14 17:12
EGBs and Gilts sold off amid a risk asset relief rally Tuesday, as concerns over US banking stability abated vs the panic of the prior two sessions.
- Risk / swap spreads fell sharply, with periphery EGBs outperforming (10Y BTPs closed 8bp tighter to Bunds) as equities rallied.
- Bunds and Gilts fell to session lows after the highly anticipated US CPI reading was on the strong side, but traded sideways/higher for the rest of the session.
- The German curve bear flattened with Schatz yields up more than 20bp as ECB hike pricing continued to recover ground. A 50bp hike on Thursday is back to 70% probability, vs 30% at Monday's low.
- Expectations for a BoE hike later this month remain uncertain after this morning's mixed jobs data was not enough to sway the MPC in any particular direction: current implied pricing is about 65% for a 25bp hike vs a pause.
- Wednesday's Europe calendar highlight is the UK budget announcement - MNI's preview is here.
Closing Yields / 10-Yr Periphery EGB Spreads To Germany
- Germany: The 2-Yr yield is up 20.2bps at 2.892%, 5-Yr is up 18.4bps at 2.512%, 10-Yr is up 16.1bps at 2.42%, and 30-Yr is up 13.4bps at 2.41%.
- UK: The 2-Yr yield is up 11.8bps at 3.481%, 5-Yr is up 11.5bps at 3.392%, 10-Yr is up 11.8bps at 3.488%, and 30-Yr is up 5.9bps at 3.894%.
- Italian BTP spread down 7.9bps at 184.5bps / Greek down 13.1bps at 191.3bps
US TSYS: Bonds Resume Decline
Mar-14 16:55
- Front month Treasury bond futures drifting lower in generally quiet early afternoon trade, short end keeping pace as yield curves still deeply flatter - but still well off last week's multi decade inverted lows: 2s10s currently -34.402 at -75.552 (appr 37bp off last week's lows). Lead 10Y futures trade above initial firm support of 113-01.5 (50-day EMA) at 113-15.5.
- Front-month 2Y note trading 102-21.5 - back near Monday's open after 2Y yield fell to 3.8367% overnight (mid-Sep territory) as banking crisis concerns debatably moderated somewhat.
- Implied volatility drifting lower despite skittishness toward any contagion related headlines involving banks, however. Global rates gapped higher overnight after headlines flagged "material weakness" in financial reporting surrounding Credit Suisse - the bid reversed amid questions over how much the CS news has already been absorbed by markets. Latest from CS CEO: "SAYS FIRM SAW CLIENT INFLOWS ON MONDAY".
- Barring bank tied headline risk, next focus is on Wednesday's PPI data for February: MoM (0.7%, 0.3%); YoY (6.0%, 5.4%), Retail Sales Advance MoM (3.0%, -0.4%) and TIC flows in the afternoon.
