EU CREDIT SUPPLY: CREDIT SUPPLY: €IG Primary Tracker
Oct-17 09:20
- Low supply week; EUR 5.5bn across ten deals from eight issuers (34th out of 41 weeks YTD by volume).
- 9th strongest aggregate cover of the year at 3.9x vs. the YTD figure of 3.2x.
- Lowest NICs since we started recording them in mid-May across out average/median and trimmed mean metrics. Louis Dreyfus leaving 25bp on the table held the average to -2bp though the median/trimmed mean figures show levels closer to -5bp.
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EQUITIES: Europe spikes higher led by the US
Sep-17 09:19
- US Equities are still gaining ground, Nasdaq futures is close to 100 points up, and is now eyeing Friday's high at 19,813.50.
- The Emini (ESZ4) sees the next immediate resistance at 5730.50.
- There's some spillovers into Europe, Estoxx (VGU4) jumps another 10 points to trade above Yesterday's high, with next resistance now seen at 4895.00.
FOREX: USD Index at Session Lows, Approaches 14-Month Low
Sep-17 09:15
- The greenback has resumed its weakening trend on Tuesday and the USD index is testing the week’s lows as we approach the NY crossover. The ongoing tilt towards a 50BP FOMC cut is weighing and despite the contained ranges across G10, the DXY is hovering just above 100.50, which would be the lowest level since July 2023.
- AUDUSD is the relative outperformer, rising 0.16% and making an attempt at 0.6767, the August US NFP high. Above here, markets will turn their focus to 0.6824, the August high, and the highest printed level since January.
- In similar vein, EURUSD is also edging towards key short-term resistance at 1.1155, the Sep 6 high. Clearance of this level would cancel a recent bearish theme and highlight scope for a stronger recovery towards 1.1202, the Aug 26 high and a bull trigger.
- GBPUSD is further extending its recovery from 130.00 and is within close proximity of the September peak at 1.3238 as we approach both UK inflation data tomorrow and the BOE decision Thursday. An extension to 1.3266, the August high, would see Cable once again at its highest level since 4th March 2022.
- USDJPY resides close to unchanged on the session, despite exhibiting a 90 pip range overnight. USDCHF (-0.15%) hovers at session low and the main support here is at the September low of 0.8375, also the lowest print since December.
- Canada inflation data and US retail sales headline the economic calendar for the remainder of the session.
GILT AUCTION RESULTS: Disappointing tail on 30-year auct; little pricing impact
Sep-17 09:13
- Despite a decent volume of bids (evident from the 2.89x bid-to-cover) the lowest accepted price of 100.613 was lower than the secondary market price 35 minutes prior to the auction window closing.
- This resulted in a tail of 0.9bp - but the tail was exacerbated by the average price of 100.768 being very healthy (the highest price during the auction window was 100.744).
- There has been little knock on impact on prices, and the price of the 4.375% Jul-54 gilt is now similar to 10 minutes before the bidding window closed.
- Gilt futures saw a minor blip on the release of the result but have largely ignored the auction result.
