EUROZONE ISSUANCE: EGB Supply: W/C 16 June (2/2)
- Spain will come to the market on Thursday to hold a Bono/Obli auction. As expected the 10-year 3.20% Oct-35 Obli (ISIN: ES0000012P33) that was launched via syndication on 28 May will be reopened for the first time. Alongside this the 1.95% Jul-30 Obli (ISIN: ES00000127A2) and the 3.15% Apr-33 Obli (ISIN: ES0000012L52) will be on offer. The auction size will be confirmed on Monday.
- France will then look to hold an MT OAT auction with E10-12bln on offer. As expected both on-the-run issues will be on offer: the 2.40% Sep-28 OAT (ISIN: FR001400XLW2) and the 2.70% Feb-31 OAT (ISIN: FR001400Z2L7) alongside the 2.75% Feb-30 OAT (ISIN: FR001400PM68).
- France will conclude issuance for the week on Thursday with an IL OAT auction with a combined E1.25-1.75bln on offer of the 0.10% Mar-28 OATi (ISIN: FR0013238268), the 0.60% Jul-34 OATei (ISIN: FR001400JI88) and the 0.10% Jul-38 Green OATei (ISIN: FR001400AQH0).
NOMINAL FLOWS: The upcoming week sees no redemptions and coupon payments totalling E3.9bln of which E1.2bln are Italian, E1.0bln are Greek, E0.6bln are Portuguese, E0.6bln are German and E0.3bln are Austrian. This leaves estimated net flows for the week at positive E30.6bln, notably higher than this week’s positive E3.0bln.
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TARIFFS: Fox-US Nears Trade Deals w/ Japan & South Korea
Charles Gaspariino at Fox Business posts on X: "Trade-tariff deals with Japan and South Korea said to be “close,” according to me Wall Street sources close to the White House. Timing unclear. India deal as well though it has been throttled by the tensions with Pakistan."
- US Trade Representative Jamieson Greer arrived in South Korea earlier today to attend a trade ministers' meeting of the Asia-Pacific Economic Cooperation (APEC) group. Greer is set to hold talks with Ahn Duk-geun, Seoul's minister of trade, industry and energy on the sidelines of the APEC meeting on Friday, 16 May. Korea Times reports "The two sides are expected to discuss follow-up measures to the high-level trade consultations between Korea and the United States, which were held last month in Washington." It remains to be seen how much progress can be made in the short term, given the high likelihood that liberal Democratic Party of Korea candidate Lee Jae-myung wins the South Korean presidency in the 3 June election, resulting in a change in administration from the current caretaker gov't.
- Japan has said that it will evaluate the agreement reached between the US and China before any future trade talks between Washington, D.C., and Tokyo.
- As noted on 13 May, Indian Minister of Industry Piyush Goyal visits D.C. from 17-20 May for talks with Greer and Commerce Sec Howard Lutnick in an effort to press towards a deal.
EGB SYNDICATION: Latvia 5-year benchmark: Priced
- EU1b 5Y Fixed (May 21, 2030) at MS+65
- Revised guidance MS+70a (+/-5) will price in range, guidance MS+80 area
- Reoffer price 99.56 to yield 2.971%
- Benchmark: OBL 2.4% 04/18/30 +72.6
- Books above EU3b (including JLM interest): Leads
- Coupon: 2.875%, annual, act/act ICMA
- (MNI saw a good chance for a E1.0-1.5bln transaction size)
- Format: Reg S CAT1, registered, senior unsecured
- Settlement: May 21, 2025
- ISIN: XS3075496896
- Bookrunners: BNPP (B&D), GS, JPM
- FTT: 3:35pm London
Details as per Bloomberg
GILT AUCTION PREVIEW: On offer next week
The DMO has announced it will be looking to sell GBP4.25bln of the 4.00% Oct-31 Gilt (ISIN: GB00BPSNBF73) at its auction next Wednesday, May 21.
