EURGBP TECHS: Bull Cycle Remains In Play

• Date $MM Issuer (Priced *, Launch #)
• 03/03 $1B #Norinchukin Bank $500M 5Y +105, $500M 10Y +130
• 03/03 $1B Federal Home Loan 2Y +3.5a
• 03/03 $Benchmark UENO Bank 5Y 7%a
• 03/03 $2.15B Applied Digital 5NC2 investor calls

• President Trump wants to cut off all trade with Spain in a dispute over military base use and NATO spending targets. The quote in full: “Spain said we can’t use their bases. That’s alright, we could just fly in and use it, nobody is going to tell us not to use it. They were unfriendly. Spain has absolutely nothing that we need other than great people. They don’t have great leadership. They were the only country in NATO that wouldn’t agree to go up to 5% [GDP defense spending]. They didn’t agree to go up to anything, wanted to keep it at 2% and they don’t even pay the 2%. We’re going to cut off all trade with Spain, we don’t want anything to do with Spain.”
• Context of the Spanish merchandise trade deficit with the US, worth 0.5% of Spanish GDP in 2025 (almost entirely from mineral fuels). Past Bank of Spain research has however shown that this is mostly offset by a services surplus with the US, from a combination of tourism and non-travel related areas. 

Tuesday's Europe rates/bond options flow included: 

• DUJ6 106.50p, bought for 14.5 and 15 in 6k (ref 106.52 in DUM6)
• DUK6 106.90/106.80/106.70/10.50p condor, bought for -1 in 5k (ref 106.67 in M6)
• ERM6 98.00/97.9375/97.875p ladder, bought for -3 in 10k
• ERM6 97.875/97.9375/98.0625c fly, bought for 1.75 in 10k
• ERM6 97.9375/98.0625cs 1x2, bought for -0.25 in 5k (5kx10k)
• ERU6 97.9375/98.0625/98.1875/98.25c condor, bought for 2 in 20k
• ERZ6 98.00/98.12/98.1875/98.3125c condor, aold at 0.5 in 52k
• SFIK6 96.55/96.65/96.75c fly, bought for 2 in 10k
• SFIM6 96.40/96.50/96.65/96.75 call condor paper paid 3.25 up to 3.75 on 50K
• SFIM6 96.65/96.75 call spread vs. 96.40/96.30 put spread paper paid -1.75 on 30K for the call spread
• SFIU6 96.55/96.65/96.75/96.85 call condor paper paid 1.75 on 12K
• SFIZ6 96.65/96.75 call spread vs. 96.25/96.15 put spread paper paid 1.75 on 10K for the call spread
• SFIZ6 96.50/96.95/97.05/97.25/97.35c condor, bought for 0.75 in 20k