BONDS: EGBs-GILTS CASH CLOSE: Modest Gains Peter Out
Sep-24 16:23
European yields closed largely unchanged Wednesday.
- The space saw a light bid in early trade, with cash bonds catching up to US Treasury gains after the European close Tuesday.
- Bunds were helped by German IFO sentiment that came in lower than expected across all of the headline indices (telling a different story to Tuesday's solid Services PMI), as well as ongoing concerns over Russia-Ukraine.
- However, gains petered out. The broader space was weighed down by supply, including short-term BTPs, 7Y Germany, and soft demand in a 5Y UK auction, while US corporate issuance (a $15B sale announced by Oracle) was also seen as a global factor.
- Additionally, OAT spreads widened after French unions called for demonstrations on October 2 after meeting with PM Lecornu, drawing a similar reaction across semi-core/peripheries.
- Gilts slightly outperformed Bunds, with very mild bull flattening in both the UK and German curves. Periphery/semi-core EGB spreads closed modestly wider.
- BOE's Greene speaks after the cash close. Thursday's data includes French consumer confidence, Eurozone money supply and UK CBI sales, while we also get the SNB decision and the ECB's Economic Bulletin.
Closing Yields / 10-Yr EGB Spreads To Germany
- Germany: The 2-Yr yield is unchanged at 2.022%, 5-Yr is down 0.1bps at 2.327%, 10-Yr is down 0.1bps at 2.748%, and 30-Yr is down 0.5bps at 3.338%.
- UK: The 2-Yr yield is down 0.1bps at 3.953%, 5-Yr is down 0.6bps at 4.098%, 10-Yr is down 1.1bps at 4.669%, and 30-Yr is down 1bps at 5.487%.
- Italian BTP spread up 2.3bps at 81.7bps / French OAT up 0.5bps at 82.2bps
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US TSYS: September'25-December'25 Roll Update - Accelerating
Aug-25 16:22
Latest Tsy quarterly futures roll volumes from September'25 to December'25 below. Percentage complete currently at or near 50%. "First Notice" date next week Friday, August 29. Current roll details:
- TUU5/TUZ5 appr 902,100 from -8.88 to -8.5, -8.62 last; 49% complete
- FVU5/FVZ5 appr 962,400 from -5.25 to -5.0, -5.25 last; 45% complete
- TYU5/TYZ5 appr 760,100 from -1.25 to -0.75, -1.0 last; 43% complete
- UXYU5/UXYZ5 app 997,700 from -0.5 to +0.25, -0.25 last; 47% complete
- USU5/USZ5 appr 477,900 from 12.25 to 13.0, 12.25 last; 50% complete
- WNU5/WNZ5 appr 550,600 from 7.25 to 8.0, 7.25 last; 50% complete
- Reminder, Sep futures don't expire until next month: 10s, 30s and Ultras on September 22, 2s and 5s on September 30. Meanwhile, Sep'25 Tsy options will expire LAST Friday, August 22.
US STOCKS: Midday Equities Roundup: Scaling Off Friday's Record highs
Aug-25 15:58
- Stocks are holding near steady (SPX eminis) to mixed ahead midday Monday, the DJIA underperforming as markets (rates, currency and equities) gradually unwound a portion of Friday's post-Chair Powell related rally.
- After climbing to new record high last Friday (45,757.84), the DJIA trades currently down down 236.08 points (-0.52%) at 45394.98, S&P E-Minis Future down 4.75 points (-0.07%) at 6478.75, Nasdaq up 64.6 points (0.3%) at 21561.27.
- Consumer Staples and Health Care sectors underperformed in the first half, highlight laggers in staples included: Keurig Dr Pepper -7.93%, Constellation Brands -3.47%, Estee Lauder -2.47%, Conagra Brands -2.19% and McCormick & Co -2.16%. Pharmaceutical stocks weighed on the Health Care sector: Dexcom -5.70%, Moderna -4.72%, Pfizer -2.16% and Align Technology -2.10%.
- On the positive side, tech stocks led gainers in the first half: Seagate Technology Holdings +3.49%, Western Digital +3.14%, Super Micro Computer +1.98% and NVIDIA +1.79% (Nvidia reports after Wednesday's close). Interactive media and entertainment shares were buoyed: Netflix +1.96%, Alphabet +1.44%, Electronic Arts +1.08%.
ITALY AUCTION PREVIEW: On offer Thursday
Aug-25 15:56
The MEF will sell the following at it's 5/10-year BTP / CCTeu auction on Thursday 28 August:
- E2.00-2.75bln of the 2.70% Oct-30 BTP (ISIN: IT0005654642)
- E1.00-1.25bln of the 3.65% Aug-35 BTP (ISIN: IT0005631590)
- E1.75-2.00bln of the 3.60% Oct-35 BTP (ISIN: IT0005648149)
- E1.50-2.00bln of the 1.05% Apr-34 CCTeu (ISIN: IT0005652828)
