RUSSIA: CBR Eyes Potential MOEX Reopening Next Week, Default Probability Steady at 80%
Mar-11 06:55
- FX/FI MARKETS (FX markets open, Stocks closed)
- Currency markets will open again today, while stocks remain closed – although the CBR is exploring a possible reopening for stocks next week.
- Global risk sentiment soured yesterday as Russia-Ukraine talks failed to make any progress (as largely expected), forcing stocks to give back a portion of Wednesday’s gains.
- Russia’s implied default probability via 5Y CDS metrics has stayed stable at 80% in the fast few days, despite promises to make payments in RUB.
- Focus is on Tuesday’s coupon, after which, a 30-day grace period is initiated before the default is confirmed – making 15 April ‘D-Day’ for the first potential default.
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US TSY OPTIONS: TYJ2 126.00 Puts Blocked
Feb-09 06:54
Latest block trade lodged at 06:39:40 London, 01:39:40 NY:
- TYJ2 126.00 puts 5.0K lots blocked at 0-44, looks like a buyer. Delta -40%.
- That is the 3rd 5K block buy of that option seen during the session thus far, with paper paying 0-43/0-44 on a total of 15K
EUROZONE ISSUANCE: EGB Supply For W/C Feb 7, 2021
Feb-09 06:51
Spain, Germany, Portugal and Italy are all still scheduled to sell bonds this week while the EU and Germany have already come to the market. We look for E23.4bln of gross nominal issuance, down from E28.6bln last week.
- The EU kicked off the week's issuance with a dual-tranche syndication on Tuesday. It sold E2.2bln of a new short 5-year Oct-26 EFSM bond and reopened the 30-year 0.70% Jul-51 NGEU bond for E5bln.
- Germany kicked off the week’s auctions on Tuesday allotting E412.8mln of the 0.10% Apr-26 ILB and and E176.7mln of the 0.10% Apr-46 ILB.
- Spain will come to the market today for its second syndication of 2022 with a new 30-year Oct-52. We pencil in a transaction size of E4-6bln.
- Germany will return to the market this morning to sell E1.50bln of the 30-year 0% Aug-50 Bund.
- Also this morning, Portugal will look to sell E1.00-1.25bln of the 7/10-year OTs: the 2.125% Oct-28 OT and the 0.30 Oct-31 OT.
- On Friday, Italy will come to the market to sell on-the-run 3/7/20 year BTPs: E2.5-3.0bln of the 0% Dec-24 BTP, E2.5-3.0bln of the 0.45% Feb-29 BTP and E1.25-1.75bln of the 1.80% Mar-41 BTP
on offer.
NET NOMINAL FLOWS: The week ahead sees negligible coupons and redemptions. With estimated gross nominal issuance of E23.4bln, net flows for the week are estimated at positive E23.3bln (from negative E9.9bln last week).
For a calendar of all announced EGB/EU/ESM/EFSF auctions see the MNI EZ/UK Bond Supply Calendar here.
EUROZONE T-BILL ISSUANCE: Bill Supply for W/C Feb 7, 2022 (2/2)
Feb-09 06:46
- Tuesday morning, Spain sold E5.847bln of 6/12-month letras vs a E5-6bln target: E951mln of 6-month Aug 12, 2022 letras and E4.896bln of new 12-month Feb 10, 2023 letras.
- Belgium sold E1.108bln of the 3-month May 12, 2022 TC and E1.410bln of the 11-month Jan 12, 2023 TC.
- Finland also came to the market on Tuesday, selling E502mln of the 6-month Aug 12, 2022 RFTB and up to E485mln of the new 9-month Nov 14, 2022 RFTB.
- The ESM concluded Tuesday's issuance by selling E1.059bln of the new 12-month Feb 16, 2022 bill on offer.
- Italy will complete bill issuance for the week on Thursday with E6.5bln of the new 12-month Feb 14, 2023 BOT on offer.
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