BOE: Dhingra remains dovish in Times Op Ed
Nothing new from Dhingra in her comments in a Times op ed (link here paywalled). She continues to point towards more votes for cuts (she's a long standing dove). She says that shocks will fade. Key paragraph here:
“The difference in inflation between the UK and our continental neighbours can be largely explained by administered prices and global commodity shocks. These should pass. We can afford to cut rates further and not put additional strain on economic growth without threatening the inflation target.”
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FOREX: EUR/AUD Breaks to New Daily Lows as AUD Benefits From Equity Strength
EUR/AUD breaking to new daily lows in recent trade (and through the WMR fix) - this puts the price clear of both the 50-dma at 1.7893 and likely avoids the formation of support at a possible uptrendline drawn off the February lows.
- Worth noting today marks month-end value date given Aug31st falls on a Sunday, so could tie-in some month-end flow to recent moves.
- Similarly, equities remain firm, helping aide AUD strength here: AUD/USD is back to flat, reversing the day's losses of ~0.4%.
ESM ISSUANCE: USD2bln WNG New 5-Year: Priced
- USD2bln WNG of the new 3.75% 5-year Sep-30 ESM-Bond
- Spread set earlier at SOFR MS+39 (SA 30/360) (guidance was SOFR+40 Area, IPT was MS+42 area, that was equiv. to CT5 + ~7.3bp)
- Books closed in excess of $13.3bn excl. JLM interest
- Reoffer 99.855 to yield 3.782%
- Issuer: European Stability Mechanism (TICKER: ESM)
- Issuer Ratings: Aaa (stable) (Moody's) / AAA (stable) (S&P) / AAA (stable) (Fitch)/ AAA (stable) (Scope)
- Format: Registered Notes, Reg S (NSS) / 144A
- Ranking: Senior, Unsecured, Unsubordinated
- Listing: Luxembourg
- Settlement: 4 September 2025 (T+6 (TARGET) / T+5 (NY))
- Maturity Date: 4 September 2030 (5Y)
- HR 101% vs CT5 (T 3 ⅞ 07/31/30 )
- ISIN: Reg S: XS3171756128 / 144A: US29881WAG78
- Coupon: 3.75%, Fixed, Semi-annual, 30/360, Following, Unadjusted
- Bookrunners: CACIB(DM/B&D) / DB / JPM
The transaction comes ahead of a USD3bln redemption for the ESM in September. That line also had a 5-year maturity initially.
STIR: BLOCK: SOFR White Pack
- 4,000 SOFR White packs (SFRU5-SFRM6) +0.000 at 1037:12ET - likely swap-tied sale with spds running wider in the short end
