EU BASIC INDUSTRIES: Covestro: EU Delay

• EUR/USD: Aug07 $1.1500(E1.1bln), $1.1600(E957mln); Aug08 $1.1500(E1.5bln); Aug11 $1.1550(E1.2bln)
• USD/JPY: Aug07 Y147.65($1.1bln), Y148.00-15($1.8bln), Y148.50($1.2bln)
• EUR/GBP: Aug08 Gbp0.8675(E1.3bln), Gbp0.8700(E1.2bln)
• AUD/USD: Aug07 $0.6500(A$1.1bln), $0.6600(A$2.0bln); Aug08 $0.6500(A$4.3bln)
• NZD/USD: Aug11 $0.5920-30(N$1.1bln)

Opening highs of 92.84 have capped upside in Gilt futures today, with volumes levelling off since this morning’s solid 10-year auction. Futures are +7 ticks at 92.75 at typing. A technical bull cycle remains intact, with the 20-day EMA at 91.99 providing initial resistance. Yields are little changed across the curve.

• MNI’s BOE preview was released earlier this morning. See here.
• It will be a major surprise if there is not a 25bp cut. The focus will instead be on the vote split, the tone of the press conference, any changes to assumptions in the scenarios and any signalling ahead of September’s QT decision.

Eurozone excess liquidity decreased by E14.899bln during the w/c July 28 (weekly average) after a small increase the previous week, bringing the measure to E2.618trn as of last Friday, August 1. This means that excess liquidity is continuing its longer-term downtrend, down by 45% from the series' high of E4.748trn in November 2022.

• The long-term decline since the peak has mostly been driven by a roll-off of the ECB's TLTROs (with the TLTRO III programme starting in 2019 with three-year maturities and with the final maturity in Dec 2024) as well as of the ECB's Monetary Policy Positions (MPPs), which are standing at a current E3.936tln combined.
• Amongst the MPPs, the ECB envisages a further average monthly roll-off of around E13.4bln of the PEPP through Dec-26 and of around E28.6bln of the APP through Jul-26 (respective f'cast horizons).