OIL: Caspian CPC Blend Differentials Supported by Drop in Nov. Exports
Caspian CPC Blend differentials remain strong, supported by lower November exports and steady demand...
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GILTS: Yields Hold Lower, Albeit With Gilts Off Highs
A bid in Tsys seems to feed into gilts over the last 30 minutes, allowing gilt futures to stabilise & trade back towards session bests after pulling back from highs through the latter part of the London morning.
- Little to really move the needle in gilt-specific terms over the past couple of hours, with ongoing UK fiscal questions and some support derived from touted U.S. investment flow earlier in the session.
- Ultimately, it has been a contained day for gilts, with yields 2-3bp lower and futures operating in a 30-tick range after respecting Friday’s low at the open.
- Impending event risk in the UK comes in the form of labour market data (Tuesday), CPI data (Wednesday) & the BoE Decision (Thursday – Bank Rate seen unchanged, focus on QT).
- See our global week ahead document & earlier bullets for more details on those events, with our customary previews and reviews due throughout the week.
US: Trump post on China trade meeting
Donald J. Trump
@realDonaldTrump
The big Trade Meeting in Europe between The United States of America, and China, has gone VERY WELL! It will be concluding shortly. A deal was also reached on a “certain” company that young people in our Country very much wanted to save. They will be very happy! I will be speaking to President Xi on Friday. The relationship remains a very strong one!!! President DJT
EGBS: Early Futures Strength Pared As US Session Gets Underway
NY desks have been happy to fade a portion of this morning’s core EGB strength, with Bund futures now +13 ticks at 128.69, off earlier highs of 128.81.
- Market moving headline flow has been fairly limited, with participants looking forward to this week’s heavy central bank calendar.
- German yields are 1-2bps lower, with the belly still outperforming. 10-year yields hover around the 2.70% handle, still within this summer’s 2.60-2.80% range.
- 10-year EGB spreads to Bunds now comfortably tighter on the session as European equity futures extend to fresh session highs. SPGBs and BTPs lead, the former support by S&P’s ratings upgrade after hours on Friday.
- The OAT/Bund spread is now 0.5bps tighter on the session at 78.5bps, looking through Fitch’s expected rating downgrade to A+ on Friday.
