CROSS ASSET: Bonds Underpinned, Equities Offered
Jun-19 13:40
Bonds have remained underpinned over the past couple of hours, with TY futures ticking to fresh session highs in holiday-thinned trade (cash Tsys are closed). That contract remains shy of post-FOMC spike highs.
- Meanwhile while Bund futures respect overnight highs.
- While some post-support spillover from gilts has been evident, a move to fresh session lows in S&P 500 e-mini futures and retest of session lows in Euro Stoxx 50 futures was also seen.
- We point to ongoing tensions between Iran and Israel (evidenced by recent rounds of rhetoric), as well as a RTRS sources report suggesting that European officials are increasingly resigned to a 10% baseline reciprocal tariff rate being levied on them by the U.S., as bond-supportive, equity-negative inputs.
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BONDS: Uptick In European Equities Adds Weight
May-20 13:37
An extension higher in European equities adds to the headwinds for core global FI in recent trade, although e-minis tick lower through the cash equity open in NY.
- Gilt, Bund and TY futures register fresh session lows, but aren’t close to threatening extremes seen over the past couple of sessions.
- German and U.S.s curves bear steepen, while the gilt curve holds its flattening theme.
PIPELINE: Corporate Bond Update: Prior Siemens Issuance
May-20 13:33
- Today's corporate bond issuance likely to be led by Siemens seven-tranche deal: 3Y +65a, 3Y SOFR, 5Y +80a, 7Y +90a, 10Y +100a, 30Y +115a, 40Y +125a.
- Size estimated around $10B-12.5B - similar to Siemens prior seven-parter issued on March 2, 2021:
- $10B *Siemens: $1.25B 2Y +30, $1.5B 3Y +40, $1B 3Y FRN SOFR+43, $1.75B 5Y +55, $1.25B 7Y +65, $1.75B 10Y +75, $1.5B 20Y +80
US TSY FUTURES: BLOCK: Jun'25 10Y Ultra/30Y Ultra Bond Flattener
May-20 13:21
Recent flattener crossed at 0900:00ET:
- -5,200 UXYM5 112-01, sell through 112-01.5 post time bid vs.
- +2,500 WNM5 115-27, post time offer
