BONDS: EGBs-GILTS CASH CLOSE: 10Y Yields See Highest Close In Weeks
Sep-25 17:13
European yields rose Thursday, with Gilts underperforming peers and periphery spreads widening to Bunds.
- Early trade was constructive, with some bull flattening in the curve attributed partly to a solid Japanese long-end auction overnight.
- But yields started to rise in late London morning trade, with large selling orders in Bund observed alongside equities extending losses, albeit no apparent headline trigger to the move.
- They would spike again on stronger than expected US economic data in the early European afternoon - including GDP and jobless claims.
- Yields closed near their highs, with 10Y Gilt and Bund each seeing their highest close since Sept 2. The German curve bear flattened on the day, with underperformance in the belly, while the UK's bear steepened.
- Periphery/semi-core EGB spreads closed wider alongside a retracement in equities, with BTPs faring worst.
- Elsewhere, the SNB held rates as expected; German GfK consumer climate more than expected.
- Friday's agenda includes Spanish final GDP, Italian confidence / sentiment indicators, and ECB Wave inflation expectations, along with appearances by ECB's Cipollone and Escriva.
Closing Yields / 10-Yr EGB Spreads To Germany
- Germany: The 2-Yr yield is up 1.7bps at 2.039%, 5-Yr is up 3.3bps at 2.36%, 10-Yr is up 2.5bps at 2.773%, and 30-Yr is up 0.4bps at 3.342%.
- UK: The 2-Yr yield is up 6.6bps at 4.019%, 5-Yr is up 7.9bps at 4.177%, 10-Yr is up 8.8bps at 4.757%, and 30-Yr is up 7.9bps at 5.566%.
- Italian BTP spread up 1.7bps at 83.4bps / Spanish up 1.1bps at 56.4bps
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
US TSYS/SUPPLY: Review 2Y Note Auction: Strong
Aug-26 17:04
- Tsy futures inch higher after the latest $69B 2Y note auction (91282CNV9) stops through: 3.641% high yield vs. 3.656% WI; 2.69x bid-to-cover vs. 2.62x prior.
- Peripheral stats: Indirect take-up inches up to 57.09% from 55.33 prior, directs slip to 33.16% vs. 34.37% prior, primary dealer take-up at 9.74% vs. 10.30% prior.
- The next 2Y auction is tentatively scheduled for September 23.
FED: US TSY 2Y NOTE AUCTION: HIGH YLD 3.641%; ALLOTMENT 57.40%
Aug-26 17:02
- US TSY 2Y NOTE AUCTION: HIGH YLD 3.641%; ALLOTMENT 57.40%
- US TSY 2Y NOTE AUCTION: DEALERS TAKE 9.74% OF COMPETITIVES
- US TSY 2Y NOTE AUCTION: DIRECTS TAKE 33.16% OF COMPETITIVES
- US TSY 2Y NOTE AUCTION: INDIRECTS TAKE 57.09% OF COMPETITIVES
- US TSY 2Y AUCTION: BID/CVR 2.69
EURUSD TECHS: Corrective Pullback
Aug-26 17:00
- RES 4: 1.1851 High Sep 10 2021
- RES 3: 1.1829 High Jul 01 and the bull trigger
- RES 2: 1.1789 High Jul 24
- RES 1: 1.1743 High Aug 22
- PRICE: 1.1660 @ 16:15 BST Aug 26
- SUP 1: 1.1597/1.1528 50-day EMA / Low Aug 5
- SUP 2: 1.1392 Low Aug 1 and bear trigger
- SUP 3: 1.1373 Low Jun 10
- SUP 4: 1.1313 Low May 30
Despite Monday's move down, the trend set-up in EURUSD remains bullish and short-term weakness is for now considered corrective. Support at the 50-day EMA remains intact, at 1.1597. A clear break of it would signal scope for a deeper retracement and potentially expose key support at 1.1392, the Aug 1 low. For bulls, a stronger resumption of gains would open key resistance and the bull trigger at 1.1829, the Jul 1 high.
