EU UTILITIES: DCC Group: Trading Update
Jul-10 07:34
(DCCLN; NR/BBB/BBB) {DCC LN Equity} * DCC reported that adj. EBIT was in line with its expectations...
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STIR: Short Term Resistance In Euribor Contracts Intact
Jun-10 07:29
Light dovish repricing in EUR STIRs following the softer-than-expected UK labour market report and early weakness in global equities, but last Friday/yesterday’s highs continue to cap topside across the Euribor strip.
- Euribor futures are up 0.5 to 3.5 ticks through the blues, with ERZ5 once against finding resistance at 98.220, and ERH6 similarly being contained by 98.240.
- ECB-dated OIS price 25.5bps of easing through year-end (vs 24.5bps at yesterday’s close), with 15bps priced through September.
- Yesterday evening, ECB’s Holzmann provided more colour on his decision to dissent at last Thursday’s meeting. However, he still noted that “if the economic situation takes a turn for the worse there could be more rate cuts”.
- In our view, this highlights that the Governing Council still leans dovish on net, and the risks are skewed towards another cut this cycle.
- Today’s regional calendar includes the June Sentix survey and commentary from Holzmann and Rehn. Villeroy has noted that policy and inflation is in a “favourable zone”, but this doesn’t mean the ECB is static.
| Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Cut Adjusted Effective ESTR Rate (bp) |
| Jul-25 | 1.894 | -2.6 |
| Sep-25 | 1.771 | -14.9 |
| Oct-25 | 1.738 | -18.3 |
| Dec-25 | 1.666 | -25.5 |
| Feb-26 | 1.653 | -26.7 |
| Mar-26 | 1.646 | -27.4 |
| Apr-26 | 1.650 | -27.1 |
| Jun-26 | 1.660 | -26.0 |
| Source: MNI/Bloomberg Finance L.P. | ||
GILTS: Bull Steepening After Labour Market Data Drives Dovish Repricing In STIRs
Jun-10 07:28
Gilts rally on the back of the labour market data (softer-than-expected wages and payrolls readings), which punctuated ongoing downside risks to BoE wage growth projections and promoted a dovish repricing in STIRs.
- Gilt futures trade through Monday & Friday highs, rallying as far as 92.49 before fading back to 92.40.
- The short-term bullish impulse remains intact in the contract.
- Initial resistance is located at the June 5 high (92.63), which protects a Fibonacci resistance point (92.79).
- Yields 4.5-6.0bp lower, curve bull steepens.
- 2s10s last 63bp, recent forays below 60bp have been short-lived and limited in scope.
- 5s30s back above 120bp after 3 daily closes below that level.
- GBP STIR pricing holds around levels flagged ahead of the gilt open. 46bp of cuts priced through December, with the next 25bp step almost fully priced come the end of the September MPC.
- We remain on the lookout for the launch of the syndication of the DMO’s new long 15-year 1.75% Sep-38 index-linked gilt.
- Broader domestic focus moves to the release of the government’s spending review, due tomorrow. More colour on that event can be found in our latest Gilt Week Ahead.
- Elsewhere, Wednesday will see BoE’s Saporta speak on monetary policy implementation. Our Gilt Week Ahead provides greater colour on that address as well.
FOREX: FX Exchange traded Roll pace
Jun-10 07:25
- As expected, some Desks have taken advantage of the steadier two way moves in Cross assets to start rolling their CME FX positions into September, the June Expiry is on the 16th June.
FX ROLL PACE:
- EUR: 20% vs 12% Yesterday.
- GBP: 24% vs 18%.
- JPY: 44% vs 35%.
- CHF: 30% vs 19%.
- CAD: 22% vs 14%.
- AUD: 22% vs 10%.
- NZD: 30% vs 8%.
