EGB OPTIONS: Bund put spread buyer
Jan-18 11:46
RXH3 138/136 ps bought for 51.5 in 2.5k
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EUROZONE ISSUANCE: EU funding plan for H1-23
Dec-19 11:45
- The EU plans to issue E80bln of NGEU and MFA+ bonds in H1-23 (conventional and green). Around E70bln of the proceeds are expected for NGEU and E10bln for MFA+ funds for Ukraine.
- To date E170bln of NGEU funding has been raised since June 2021 (out of a E800bln programme running until end-2026). And E7.2bln of MFA funds were raised for Ukraine in 2022 with a total of E18bln expected to be raised for Ukraine across the whole of 2023.
- The EU will start to brand these issues all as EU-bonds rather than branding them for the individual programmes they relate to (but will keep green bond issuance separate as it is segregated spending).
- "Potential new financing needs related to REPowerEU, financed partially by unused loans under the RRF, will not affect the funding needs for H1 2023."
- "Bond auctions can be single- or multi-bond auctions and will be used to tap existing bonds or to issue new bonds."
- There are 7 planned syndication weeks in H1-23 and eight planned auction dates.
- EU-bill auctions will continue twice per month in the same format as previously (3/6-month bills available at each auction with new 6-month EU-bill in the first auction of each month).
- The full funding plan is available here.
- Furthermore, the EU has announced it will provide a framework for quoting on the secondary market with a view to increasing liquidity from summer 2023 with a new repo facility to be implemented in early 2024.
OUTLOOK: Price Signal Summary - Gold Bulls Still In RThe Driver's Seat
Dec-19 11:36
- On the commodity front, trend conditions in Gold remain bullish despite last Thursday’s sell-off. Pullbacks are considered corrective and key short-term support to watch is $1765.9, Dec 5 low. The yellow metal breached $1810.0 last week, the Dec 5 high, to resume the uptrend. This opens $1842.7, the 50.0% retracement of the Mar - Sep bear leg.
- In the Oil space, trend conditions in WTI futures remain bearish. However, recent gains have highlighted a bullish corrective cycle and last week this resulted in a test of the 20-day EMA, at $77.07. A clear break of this hurdle would signal scope for an extension towards $80.57, the 50-day EMA. On the downside, the bear trigger lies at $70.08, the Dec 9 low.
US TSYS: Scaling Back Friday's Support
Dec-19 11:33
Tsy futures trading weaker (30YY 3.5872 +.0421) at the start of a shortened Christmas holiday week (early Friday close for Globex at 1300ET, Monday full close w/ Globex reopening 1700ET).
- Futures reversing much of Fri's late support despite hawkish comments from SF Fed Daly and Cleveland Fed Mester. Daly:
- "We see a slowdown coming in a way that would be predicted by raising interest rates, and we still have a long way to go," she told the American Enterprise Institute. Daly said she boosted her inflation projection in the Fed's dot plots largely because of the tight labor market, and also said that while goods inflation is slowing, core services prices will be more stubborn.
- Bonds near late overnight lows on light volume across the board (TUH3 leads w/ under 145k), Yield curves steeper w/ 2s10s +3.683 at -66.551 (-65.032 high).
- No scheduled Fed speakers today, limited data with NAHB Housing Market Index (34 est) at 1000ET; US Tsy auctions: $54B 13W and $45B 26W bills at 1130ET.
- Fed funds implied hike for Feb'23 steady at 32.9bp, Mar'23 cumulative 46.5bp to 4.798%, May'23 51.5bp to 4.847%, terminal slips to 4.84% in Jun'23.
