BUNDS: Bund and EGBs unwind Yesterday's rally
May-08 09:12
- Continued unwind in EGBs, Bund and and OAT are leading.
- A small support moves up to 131.24 in Bund, and as a note a test down to 130.92 would represent a reversal to where the German Bund was trading at before the 93 ticks rally post the French supply Yesterday.
- The main initial downside area is still at 130.75/130.70.
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GILT AUCTION RESULTS: Strong gilt auction - futures move 25 ticks higher
Apr-08 09:09
- Decent premium to the market for the lowest accepted price (LAP) at 85.526 versus pre-market mid-price of 85.491. With a solid bid-to-cover (above 3x) and tail only 0.2bp.
- The 4.375% Jul-54 gilt has moved off of its lows on the back of that - and is now trading notably above the average auction price of 85.554 (85.712 at writing).
- 10s30s hasn't really moved post-auction, the move higher is being seen further down the curve.
- Gilt futures traded to 91.92 just ahead of the results - but are now 92.17 (25 ticks higher). Albeit this only puts us back to where we were around 7 minutes ahead of the bidding window closing.
GILT AUCTION RESULTS: 4.375% Jul-54 gilt
Apr-08 09:03
| 4.375% Jul-54 Gilt | Previous | |
| Amount | GBP2.25bln | GBP2.25bln |
| Avg yield | 5.357% | 5.104% |
| Bid-to-cover | 3.04x | 2.85x |
| Tail | 0.2bp | 0.2bp |
| Avg price | 85.554 | 88.951 |
| Low price | 85.526 | 88.919 |
| Pre-auction mid | 85.491 | 88.884 |
| Previous date | 04-Mar-25 |
FOREX: Looking to Gauge Sustainability of the Bounce
Apr-08 08:58
- Markets are bouncing Tuesday, led higher by the reversal off Monday's pullback lows for US stock futures. The E-mini S&P has bounced off yesterday's 4832.00 to reclaim near 350 points to point to a steadier outlook into the NY crossover today.
- For currencies, this has translated to AUD and NZD strength: AUD/USD has shown back above $0.6050 NZD/USD back above $0.5600. While these recoveries amount to over 1.5%, they still nurse significant losses off last week's highs, meaning any fade in the corrective bounce will have markets re-considering recent lows.
- This leaves the USD as the poorest performing currency in G10, although the ability of the market to hold above 103.00 keeps the market technically constructive in the short-term.
- Datapoints are few and far between Tuesday, keeping market focus on the sustainability of this recovery from lows. Monday's acute volatility is another sign that markets will read credibly into any well-sourced reports of policy U-turns, keeping attention on the US news cycle and any signals from the President.
- Trump's schedule Tuesday sees numerous events - most consequential of which are his executive order signing event at 1500ET/2000BST and comments set to be made at an NRCC dinner after markets close.
