JGBS: [CORRECT] MOF Headlines On Next Year's Issuance
Clarifies which fiscal year BBG/Reuters reporting refers to.
Headlines crossing via Bloomberg from the Japanese MOF's meeting with primary dealers:
- "*JAPAN MOF SAYS PRIMARY DEALERS SEEK MORE 2Y/5Y/10Y BOND SALES"
- "*JAPAN MOF SAYS PRIMARY DEALERS WANT LESS SUPER-LONG BOND SALES"
These headlines come out of the conference with primary dealers discussing the next fiscal year (Apr 26 - Mar 27). Note that overnight, Reuters sources provided colour on issuance plans for the remainder of the current fiscal year:
- "(Reuters) - Japan's government is likely to increase issuance of two- and five-year bonds in a revision to its bond programme for the current fiscal year to fund its economic stimulus package, two government officials familiar with the matter told Reuters."
- "The government will make no change to the issuance amount for 10-year, 20-year, 30-year and 40-year JGBs, they said."
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METALS: Precious Metals, Broader Commodities Complex Under Early Pressure
- Both precious and industrial metals are under pressure early Tuesday, with Palladium (-3%) and Platinum (-3.2%) prices leading Silver (-2.3%) and Gold (-2%) lower.
- A likely combination of positioning unwinds and profit-taking are in focus as investors look for a potential trade deal between the US and China, helping to loosen up supply as well as an expected Fed cut tomorrow playing out.
ECB: Q3 BLS Suggests The Door Shouldn't Be Closed To Another Cut
The ECB’s Q3 BLS broadly echoes the signals from yesterday’s September credit data and SAFE survey. There was a small net tightening in credit standards in Q3, and while net demand increased, it remains weak. Geopolitical and trade risks were cited as factors contributing to tighter standards and subdued demand. Overall, the survey doesn’t signal an urgent need for another rate cut, but suggests the door should not be closed to such a move. Too hawkish a signal from President Lagarde on Thursday could reflexively promote further tightening in credit standards/conditions.
The full survey is here: https://www.ecb.europa.eu/stats/ecb_surveys/bank_lending_survey/html/ecb.blssurvey2025q3~d3e99917cc.en.html
Standards: Small unexpected net tightening
- “Euro area banks reported a small unexpected net tightening of credit standards for loans or credit lines to firms in the third quarter of 2025 (net percentage of banks of 4%)”
- “Across the four largest euro area countries, banks in Germany reported a tightening of credit standards while banks in France, Italy and Spain reported unchanged credit standards.”
- “Banks reported unchanged credit standards for housing loans and a moderate net tightening for consumer credit (net percentages of 0% and 5% respectively). Changes in banks’ risk perceptions were the main drivers of this tightening for consumer credit. “
Demand: Increased, but remains weak
- “Firms’ demand for loans increased slightly in the third quarter of 2025 (net percentage of 2%) but remained weak overall.”
- “Several banks referred to a dampening impact on loan demand from global uncertainty and the related trade tensions. Across the four largest euro area countries, banks in Germany, Italy and Spain reported a net increase in firms’ loan demand, whereas banks in France reported another marked net decrease. “
- “Banks reported a further net increase in demand for housing loans, while demand for consumer credit was broadly unchanged (net percentages of 28% and 1% respectively)“
US TSY OPTIONS: Large outright Put buyer
TYZ5 111.50p, bought for '03 in 10k.
