HYBRIDS: EDP (EDPPL): Tender Results due shortly

Of note:

USDCAD 1.08bn at 1.3980/1.3985 (tue).

AUDUSD ~1bn at 0.6625 (tue).

NZDUSD 2.1bn at 0.5650/0.5675 (wed).

EURUSD 1.65bn at 1.1550 (thu).

USDCAD 2.25bn at 1.3900 (fri).

• EURUSD: 1.1475 (567mln), 1.1515 (496mln), 1.1525 (554mln), 1.1540 (460mln), 1.1550 (340mln), 1.1560 (270mln), 1.1570 (356mln), 1.1600 (561mln).
• GBPUSD: 1.3100 (468mln).
• EURGBP: 0.8775 (300mln).

• MNI: UK OCT FINAL MANUF PMI 49.7 (49.6 FLASH, 46.2 SEP)

The latest round of weekly sell-side reports that we have read points to a neutral to bullish view when it comes to gilts:

• Bank of America: We retain a bullish tactical bullish bias.
• Goldman Sachs: Recent outperformance can extend and we lower our 10-Year forecasts to 4.25% at end-2025 (from 4.40%) and 4.00% at end-2026 (from 4.25%). The main driver of outperformance is ongoing disinflation, which should calm long-end risk premium and allow the BoE to cut below market pricing. The upcoming Budget should also help sustain modestly lower yields. There should only be modest revisions to near-term supply, whereas the required fiscal tightening measures should weigh on growth and inflation. Most importantly, the scale of the budget adjustment will likely mean the UK government adopt a more credible set of deficit-reduction measures, which should improve the market’s view of the fiscal outlook. The DMO is also likely to keep WAM relatively low, although we do not expect further skew away from long-end issuance allocation.
• TD Securities: We expect 10s to remain within the 4.30-4.50% range near term. A push lower would require substantive shifts in the BoE’s rhetoric at the November meeting. Our year-end forecast for Gilts remains at 4.40%. Steepening bias on the curve has been losing momentum globally. Our expectations of lower duration supply makes us favour 5s30s gilt flatterers.