SPAIN AUCTION RESULTS: Bono/Obli/ObliEi auction results
| 2.70% Jan-30 Bono | 0.85% Jul-37 Obli | 1.15% Nov-36 Obli-Ei | |
| ISIN | ES0000012O00 | ES0000012I24 | ES0000012O18 |
| Amount | E1.479bln | E1.401bln | E481mln |
| Previous | E1.447bln | E2.146bln | E534mln |
| Avg yield | 2.471% | 3.414% | 1.463% |
| Previous | 2.483% | 3.452% | 1.392% |
| Bid-to-cover | 1.97x | 1.79x | 2.63x |
| Previous | 2.54x | 1.48x | 2.38x |
| Avg Price | 100.885 | 75.701 | 96.833 |
| Low Price | 100.850 | 75.640 | 96.780 |
| Pre-auction mid | 100.830 | 75.566 | 96.647 |
| Prev avg price | 100.872 | 73.899 | 97.526 |
| Prev low price | 100.840 | 73.870 | 97.480 |
| Prev mid-price | 100.805 | 73.756 | 97.379 |
| Previous date | 02-Oct-25 | 16-Jan-25 | 06-Nov-25 |
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SPAIN T-BILL AUCTION RESULTS: 6/12-month letras
| Type | 6-month letras | 12-month letras |
| Maturity | May 8, 2026 | Nov 6, 2026 |
| Amount | E1.428bln | E3.6bln |
| Target | E4.5-5.5bln | Shared |
| Previous | E1.812bln | E3.82bln |
| Avg yield | 1.944% | 1.990% |
| Previous | 1.937% | 2.006% |
| Bid-to-cover | 1.98x | 1.5x |
| Previous | 2.07x | 1.58x |
| Previous date | Oct 07, 2025 | Oct 07, 2025 |
UK FISCAL: Reeves Prepares Ground For Tax Hikes; Voters Already Expecting Them
Chancellor of the Exchequer Rachel Reeves' speech earlier this morning, in which she talked about the UK's economic situation with regard to the 26 Nov budget, but not about the measures the budget would contain, was somewhat oddly timed. There has been significant speculation in recent weeks that Reeves intends to break the Labour manifesto promise of not raising income tax, VAT or National Insurance contributions.
- Given the language used in her speech (see UK FISCAL: Reeves doesn't confirm manifesto pledges to taxes or working people, UK FISCAL: Reeves refusing to rule out working people tax increases), it is clear that the chancellor was attempting to prepare the ground for tax rises in the budget statement.
- However, by refusing to confirm or deny that the manifesto pledge will be breached, the main impact of the address will be to set up 3+ weeks of more media speculation, and ensure that headlines around looming tax hikes and 'Labour broken manifesto promises' remain prominent in the UK news cycle rather than only coming back to the fore in the direct run-up to the budget.
- Latest polling from YouGov shows the public is already overwhelmingly expectant of a manifesto pledge-breaking income tax rise. Sixty-four per cent of respondents believe Reeves either definitely or probably will raise the basic rate of income tax, with 44% of supporters of the right-wing populist Reform UK saying they 'definitely' think Reeves will enact the first increase to the basic rate of income tax since 1975.
Chart 1. Opinion Poll: "From what you have seen and heard, do you believe Rachel Reeves will or will not raise the basic rate of income tax in next month's budget?", %, Overall and by Party Affiliation
Source: YouGov, MNI. Fieldwork: 27 Oct. 5,287 respondents.
FOREX: FX OPTION EXPIRY
Of note:
EURUSD 1.11bn at 1.1525.
NZDUSD 2.33bn at 0.5650/0.5675 (wed).
EURUSD 1.46bn at 1.1500 and 1.65bn at 1.1550 (thu).
USDJPY ~1bn at 153.00 (thu).
AUDUSD ~1bn at 0.6500 (fri).
- EURUSD: 1.1475 (651mln), 1.1525 (1.11bn).
- GBPUSD: 1.3150 (790mln).
- EURGBP: 0.8770 (547mln).
- USDCAD: 1.3980 (1.06bn).
