EUROZONE ISSUANCE: EGB Supply – W/C 12 January (2/2)
Jan-09 14:51
- Germany will hold its first triple-line long-dated auction on Wednesday. On offer will be E1bln of each of the 3.25% Jul-42 Bund (ISIN: DE0001135432), the 0% Aug-52 Bund (ISIN: DE0001102572) and the 2.90% Aug-56 Bund (ISIN: DE000BU2D012).
- As well as being the first triple-line auction, this is the first that sees a 15/20-year Bund on offer alongside 30-year Bunds – a theme that will be the case for the additional line in all 15/20/30-year Bund auctions through 2026. This year the DFA has more flexibility regarding the second line on offer.
- Spain will look to conclude auction issuance for the week on Thursday with a Bono/Obli auction, including the launch of a new 3-year Bono. On offer will be the new 2.35% Mar-29 Bono (ISIN: ES0000012P90), the on-the-run 15-year 3.50% Jan-41 Obli (ISIN: ES0000012O75) and the 45-year 1.45% Oct-71 Obli (ISIN: ES0000012H58) – the longest maturity Obli. The auction size announcement will come on Monday.
- We had flagged the prospect of a new 3-year Bono being launched next week in the MNI EGB Supply Daily. Tesoro Publico has decided to use a 31 March 2029 maturity date and this means that for the first time there will be six non-linker Bono/Oblis maturing within the calendar year of 2029.
- As we noted in the Daily, there still seems to be strong demand in the 3-year area and there isn't a linker maturing in 2029 so there is definitely the fiscal space to launch this issue without having too large of a hump in maturities.
NOMINAL FLOWS: The upcoming week will see E26.7bln of redemptions, of which E15.1bln are from an Italian 3-year BTP and E11.6bln are from a Dutch 4-year DSL. Coupon payments for the week total E6.3bln of which E4.6bln are from the Netherlands and E1.6bln are from Italy. This leaves estimated net flows for the week at positive E19.3bln, down from E63.1bln this week.
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BOC: Changes In The Rate Decision Statement – Dec vs Oct
Dec-10 14:47
A comparison of December's rate decision statement vs the previous edition in October in the PDF below:
BOC: BOC Maintains Policy Rate at 2.25%, Signals Hold Unless Material Shock
Dec-10 14:45
- "If inflation and economic activity evolve broadly in line with the October projection, Governing Council sees the current policy rate at about the right level to keep inflation close to 2% while helping the economy through this period of structural adjustment," statement Wed says, echoing last decision.
- Bank says while it is prepared to respond to material shocks, it reiterates monetary policy cannot restore supply hit from US trade war.
- Most global economies and Canada's continue to show some resilience amid US trade war.
- Moderate Q4 GDP is still expected after a surprisingly strong Q3. Labour market shows some improvement but hiring plans are modest.
- Bank sees CPI inflation staying near 2% target as it has been for over a year now. Core inflation remains between 2.5-3%.
BOC: Instant Answers For Bank of Canada Interest-Rate Decision
Dec-10 14:45
Following are the Instant Answers for the Bank of Canada interest-rate decision:
- Target for overnight rate: Unchanged at 2.25%.
- Does the Bank signal it is prepared to lower rates in the future? Not answered.
- Does the Bank signal it is prepared to raise rates in the future? Not answered.
- Does the Bank say the policy rate appears appropriate if its economic forecast is realized? YES.
- Does the Bank signal it intends to leave rates on hold? YES.
