EUROZONE ISSUANCE: EGB Supply
The EU, Finland and Greece have all held syndications this week while Italy and Germany have held auctions. We estimate gross issuance for the week at E29.0bln.
This week saw a single redemption of E5.0bln from a formerly 8-year ESM-bond. Coupon payments total E9.2bln, of which E8.4bln are French and E0.3bln Belgian. Together with some reasonable syndications, this leaves estimated net flows for the week at positive E12.0bln, versus negative E4.1bln last week.
For more on this week's issuance and a look ahead to next week's supply see the PDF here:
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BUND TECHS: (M4) Testing resistance At The 50-Day EMA
- RES 4: 134.78 50.0% retracement of the Dec 27 - Feb 29 bear cycle
- RES 3: 134.48 High Feb 5
- RES 2: 134.15 High Mar 8 and the bull trigger
- RES 1: 133.28/69 High Mar 25 / 12
- PRICE: 132.91 @ 05:34 GMT Mar 27
- SUP 1: 132.28/131.54 Low Mar 22 / 18
- SUP 2: 131.23 Low Feb 29 and the bear trigger
- SUP 3: 131.00 Round number support
- SUP 4: 129.88 Bear channel base drawn from the Dec 27 high
Bund futures continue to trade closer to their recent highs and a S/T bull cycle remains in play. Price has pierced the 50-day EMA - at 132.95. A clear break of this EMA would be a bullish development and a continuation higher would open the key resistance at 134.15, the Mar 8 high. Key support has been defined at 131.23, the Feb 29 low. Clearance of this level would confirm a resumption of the downtrend that started last December.
US TSYS: Treasury Futures Little Changed, Bullish Bets Hit Lowest Since July
- Jun'24 10Y futures have traded sideways on Wednesday, while volumes remained on the low side, we hit lows of 110-19 and a high of 110-21+ and now trade - 00+ at 110-20. 5Y traded similar making lows of 106-30+ and a high of 107 heading into the European open we currently trade -00+ for the day at 106-31
- Looking at technical levels: Initial support lays at 110-08+ (Mar 21 low) while below here the 109-24+ (Mar 18 low/ the bear trigger), further down 109-14+ (Nov 28 low). While to the upside resistance holds at 110-30+ (Mar 21 & 22 high), above here 110-31+ (50-day EMA), while a break above here would open a retest of 111-24 (Mar 12 high).
- Cash Treasury curve has done very little today with the 2Y yield +0.4bp at 4.595%, 10Y +0.2bp to 4.234%, while the 2y10y unchanged at -36.354
- (Bloomberg) -- What Baltimore Bridge Collapse Means for Inflation (See link)
- (Bloomberg) -- Bond Managers Unwind Bullish Futures Bets to Lowest Since July (See link)
- Wednesday Data Calendar: Wholesale Sale/Inventories, Tsy $43B 7Y Note Auction while Fed Gov Waller will discuss economic outlook at Economic Club NY at 1800ET (text, Q&A).
ASIA STOCKS: Equities Mostly Higher, BoJ Speak, AU CPI Holds Steady
Regional Asian equities are mostly higher today. Japanese equities are getting a boost from the weaker yen. BoJ speak has been the main focus in the region, Ueda expressed confidence in achieving the price target due to the very low current short-term rate, Suzuki & Tamura mentioned they will do the utmost to ensure FX stability. South Korea had business manufacturing data earlier, while Australia had CPI data.
- Japan equities are higher today as the yen edged closer towards a 34 year low, while investors have also been seen adjusting positions heading into FY end later this week. Exports have been the largest gainers today with wholesale trading and transportation names the top gainers in the sector. BoJ's Tamura is currently speaking in Aomori where he emphasized that accommodative financial conditions will persist, indicating a commitment to maintaining supportive monetary policies. He stresses the importance of future monetary policy guidance in ensuring a gradual move towards policy normalization. Tamura expects a positive cycle of wages and prices to continue and highlights the goal of normalization as restoring the function of interest rates. He expresses optimism that a virtuous cycle in the economy is likely to persist. The Topix is up 0.95%, led higher by real estate names after data showed land prices had climbed, while hawkish comments from the BoJ helped add speculations borrowing costs will remain low, while the Nikkei 225 is up 1.24%.
- South Korean equities opened slightly higher but have erased those gains to now trade in the red. Earlier the BoK business manufacturing and non-manufacturing sentiment indicators printed for April. On the manufacturing side we slipped to 73 from 75. Non-manufacturing eased to 69 from 70. While foreign investors have pumped $3.4b into the markets over the past 5 days. The Kospi is now down 0.10%
- Taiwanese equities are higher today, with the Taiex now up 0.50%, after initially opening a touch lower. Semiconductor names have been the largest contributors to index moves today, while recently there has been a lot of talk from policy officials warning investors to stop flooding the market and pumping stock as they fear stock market bubbles while also looking at cracking down on internet influencers. Taiwan equity flows had largely been tracking SK's however have diverged over the past week with -$955m of net outflows occurring.
- Australian equities are higher today, earlier we had WBC Consumer confidence which fell from the month prior hitting -1.8% vs 6.2% in Feb, while the leading index rose to 0.8% from -0.8% in Jan and finally CPI data was in line with Jan coming in at 3.4% vs 3.5% expected. Most sectors ticked higher today, other than tech and Utilities. The ASX200 closed up 0.51%
- Elsewhere in SEA, New Zealand equities are lower today, down 0.18% earlier NZ released their Budget Policy Statement where they announced the treasury had downgraded expectations for GDP growth, Singapore Equities are 0.76% higher, Indian Equities up 0.70%, Philippines equities are down 0.12%, while Malaysian equities are down 0.32%
