SEK: Domestic Funds Are Now YTD Net Sellers Of Swedish Equities
Oct-10 09:45
Swedish Investment Fund Association members were net sellers of domestic equity funds for the sixth consecutive month in September. While a repatriation/reallocation of funds out of the US and back into Sweden was touted as an important driver of SEK outperformance in Q1, this dynamic appears to have faded in Q2 and Q3. SEK remains the G10 outperformer year-to-date though, supported by better growth prospects amid increased fiscal and monetary easing.
- In September, Swedish members net sold SEK6.9bln of domestic equity funds. Year-to-date, these funds have now seen net outflows of SEK3.4bln, with February’s significant SEK22.7bln net inflow having more than unwound.
- Swedish members were once again small net sellers of US equity funds in September (but to a much lesser extent than in Q1). Instead, more money has been directed to global equity funds in recent months.
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EGBS: Bunds Trading More Steadily After Early Volatility; 15-year Auction Weak
Sep-10 09:43
- Bund futures are +15 ticks at 129.18, trading more steadily after a spree of volatile price action around the European cash open. Headline flow has been dominated by reactions to Poland’s downing of Russian drones in its territory overnight. This may be driving some light haven flows into core EGBs.
- The Sep 8 high of 129.33 was pierced in Bunds this morning, exposing the Aug 5 high at 129.50 as the next resistance to watch.
- Note that European equities traded quite resiliently until about 0900BST, but Estoxx 50 futures have fully erased gains in the 90 minutes since.
- German yields are +0.5bps to -0.5bps across the curve, with the 10-year tenor outperforming. The initial downside target for 10-year yields will be the 2.60% handle, which was last tested in early August.
- 10-year EGB spreads to Bunds are biased up to 1.2bps wider, with OATs and GGBs underperforming. Markets are digesting President Macron's appointment of former defence minister Sebastien Lecornu to the PM post. Initial reactions from opposition parties suggest Lecornu will face many of the same challenges as his predecessors in passing a budget.
- In supply, Germany and Portugal have held conventional auctions while Luxembourg is launching a new 10-year LGB via syndication. The 4.75% Jul-40 Bund auction results were weak.
- Spanish industrial production data was a little weaker than expected (-0.5% M/M vs -0.2% cons, 1.0% prior) while Italy was stronger than forecast (0.4% M/M vs 0.1% cons, 0.2% prior).
- Global focus turns today’s US PPI report at 1330BST, before the ECB decision and US CPI cross tomorrow.
GERMAN AUCTION RESULTS: 4.75% Jul-40 Bund / 2.60% May-41 Bund
Sep-10 09:38
| 4.75% Jul-40 Bund | 2.60% May-41 Bund | |
| ISIN | DE0001135366 | DE000BU2F009 |
| Total sold | E1bln | E1.5bln |
| Allotted | E603mln | E1.167bln |
| Previous | E490mln | E1.135bln |
| Avg yield | 2.96% | 3.03% |
| Previous | 2.85% | 3.00% |
| Bid-to-offer | 0.77x | 1.75x |
| Previous | 5.68x | 1.15x |
| Bid-to-cover | 1.28x | 2.25x |
| Previous | 5.80x | 1.52x |
| Avg Price | 121.26 | 94.68 |
| Low Price | 121.22 | 94.65 |
| Pre-auction mid | 121.264 | 94.620 |
| Prev avg price | 123.00 | 95.06 |
| Prev low price | 122.94 | 95.05 |
| Prev mid-price | 122.902 | 95.011 |
| Previous date | 28-May-25 | 09-Jul-25 |
PORTUGAL AUCTION RESULTS: OT Results
Sep-10 09:37
| 3.00% Jun-35 OT | 1.15% Apr-42 OT | |
| ISIN | PTOTEAOE0005 | PTOTEPOE0032 |
| Amount | E621mln | E510mln |
| Previous | E563mln | E489mln |
| Avg yield | 3.059% | 3.637% |
| Previous | 3.381% | 3.342% |
| Bid-to-cover | 1.57x | 1.74x |
| Previous | 1.99x | 1.90x |
| Avg Price | 99.500 | 69.430 |
| Pre-auction mid | 99.366 | 69.144 |
| Prev avg price | 96.750 | 71.730 |
| Prev mid-price | 96.545 | 71.511 |
| Previous date | 12-Mar-25 | 12-Feb-25 |
