CANADA: CAD Yields Somewhat Resilient To Reciprocal Tariff Headlines
Feb-07 16:41
- Just the mention of tariffs, even with the vague wording of the Reuters sources story, has seen GoC yields fall although it’s a limited move with 2Y yields now -3bps since the headlines and a 2bp widening in the Can-US differential.
- The reciprocal wording and current 30-day delay of previously imposed US tariffs on Canada sees Canada largely as immune from the latest headlines, belying the 40 pip increase in USDCAD which is sensitive to broader risk sentiment.
- The strong Canadian jobs report sets the tone for today’s price action, with GoC yields currently 8.5-10bp higher on the day across the curve (7.5-8.5bp post 0830ET data).
- The Can-US 2Y diff stands at -159.5bp (+4bp on the day) vs pre-tariff reprieve lows of -180bps.
- BoC-dated OIS for the Mar 12 decision has shifted from 18-19bp pre-data to 15bp of cuts for the Mar 12 decision, with of course that tariff deadline on Mar 4 a major focal point.
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EGB SYNDICATION: Italy Dual-Tranche: New 10-year / New 20-year Green: Priced
Jan-08 16:40
New 10-year - record book for a single tranche
- Reoffer: 99.577 to yield 3.733%
- Size: E13bln (MNI expected E10bln)
- Spread set earlier at Feb-35 BTP + 7bp (guidance was + 9bps area)
- Benchmark price ref: 101.84 / 3.663%
- Books in excess of E142bln (ex JLM interest) - record single tranche book
- Maturity: 1 August 2035
New Green 20-year
- Reoffer: 99.465 to yield 4.181%
- Spread set at 4.45% Sep-43 BTP +5bp (guidance was + 8bps area)
- Benchmark price ref: 104.66 4.131%
- Books in excess of E127bln (ex JLM interest) pre-rec
- Size previously set: E5bln WNG
- Maturity: 30 April 2046
For both:
- Bookrunners: Banca Monte dei Paschi di Siena, BNP PARIBAS (DM/B&D), Citi, Crédit Agricole CIB, NatWest Markets and UniCredit
- Settlement: 15 January 2025 (T+5)
- Timing: Price 16:22GMT / 17:22CET, FTT immediately
- Record dual-tranche book size
From market source
FED: US TSY 17W BILL AUCTION: HIGH 4.190%(ALLOT 22.73%)
Jan-08 16:32
- US TSY 17W BILL AUCTION: HIGH 4.190%(ALLOT 22.73%)
- US TSY 17W BILL AUCTION: DEALERS TAKE 35.31% OF COMPETITIVES
- US TSY 17W BILL AUCTION: DIRECTS TAKE 5.56% OF COMPETITIVES
- US TSY 17W BILL AUCTION: INDIRECTS TAKE 59.13% OF COMPETITIVES
- US TSY 17W BILL AUCTION: BID/CVR 3.24
US-EU: Blinken And Barrot Downplay Greenland Comments, Indicate Gaza Progress
Jan-08 16:24
US Secretary of State Antony Blinken and French Foreign Minister Jean-Noël Barrot have spoken on a range of issues to reporters at a press conference in Paris, following a bilateral meeting earlier today.
- At the top of the presser, both ministers note that the Lebanon-Israel ceasefire agreement is operating as planned, with a withdrawal of 30% of Israeli troops from Lebanon underway.
- On Gaza, Blinken says: “We’re very close to a ceasefire and hostage agreement… I hope we can get it over the line in the time we have left but if we don’t, then the plan will be handed over to the [Trump administration].”
- Blinken reiterated that a “transformative” agreement to normalise relations between Israel and Saudi Arabia is “ready to go” if there is a ceasefire in Gaza.
- On US President-elect Donald Trump’s proposed acquisition of Greenland, Blinken said: “The idea expressed about Greenland is obviously not a good one, but maybe more important: It’s obviously one that is not going to happen, so we probably shouldn’t waste a lot of time talking about it.”
- Barrot says that the Franco-US relationship has survived 59 US elections, and “will survive the 60th”.
- Barrot: “Do we think the US will take Greenland? The answer is no… That being said we are entering a period of time where force is present everywhere…”
- Barrot quotes a comment from French President Emmanuel Macron on Monday saying that Europe needs to “wake up” and “strengthen up”.
