EU FINANCIALS: Caixabank Tender
Caixabank Tendering for CABSK 5.25% Perp at 101 - tender size maximum matches the issue size -, likely to issue € securities
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FOREX: FX OPTION EXPIRY - Some large Expiry in the EUR
FX OPTION EXPIRY: Watch the EUR on Friday.
Of note:
EURUSD 1.74bn at 1.0525.
EURUSD 1.02bn at 1.0500 (wed).
AUDUSD 1.01bn at 0.6350 (wed).
USDJPY 1.49bn at 155.00 (thu).
EURUSD 4.75bn at 1.0450, 7.24bn at 1.0500, 3.35bn at 1.0525 (fri).
EURGBP 2.6bn at 0.8290/0.8300 (fri).
USDCAD 3bn at 1.4200/1.4220 (fri).
AUDUSD 1.6bn at 0.6350 (fri).
USDCNY 2.83bn at 7.3000 (fri).
EURUSD 1.94bn at 1.0500 (mon).
- EURUSD: 1.0400 (955mln), 1.0425 (269mln), 1.0475 (858mln), 1.0525 (1.74bn).
- GBPUSD: 1.2640 (600mln).
- USDCAD: 1.4240 (520mln).
December IFO Weaker Than PMI, Deterioration Across Most Sectors
Germany's IFO Business Climate Index fell in December to its lowest value since May 2020, 84.7 (85.6 Nov), also coming in short of expectations of 85.5. The print appears even less optimistic than Monday's flash PMI release in indicating a deterioration across both services and manufacturing. Overall, the release underpins the narrative of ongoing weakness in the German economy.
- The main downside driver were future expectations, which fell to 84.4 (vs 87.5 cons; 87.0 prior), the lowest value since February. The current assessment declined to 85.1 (vs 84.0 cons; 84.3 prior).
- Across sectors, manufacturing firms were less confident with the current stance - but mainly, their future outlook deteriorated in December. For services firms, the current assessment was slightly brighter than before, but expectations declined significantly. Hospitality firms are reporting decent Christmas business but transport and logistics services firms are concerned about conditions in the next months, IFO reports.
- With also trade printing weaker than before, construction was the only sector seeing a minor uptick - although from a very low level.
BUNDS: German 2025 Issuance Plan Helps Bunds Extend Higher
Bund futures were already scaling off lows heading into the 2025 German funding plan release, but the details of the plan have supported a further extension higher. Bund futures now +10 ticks today at 134.83 (after reaching a high of 134.94). Resistance is not seen till 135.35 (20-day EMA) and 136.01 (Dec 12 high).
- The fall in planned capital market issuance lies in the bottom half of expectations we had seen. Meanwhile, there is a bigger reduction in Bubill issuance than expected.
- Most notable part of the plan is that there are increases in Bobl and 30-year Bund issuance, while decreases in issuance are centred around Schatz and 10-year Bund.
