BONDS: EGBs-GILTS CASH CLOSE: OATs Outperform On Political Progress
Nov-12 18:53
OATs outperformed the broader space Wednesday, with Gilts underperforming.
- EGBs and Gilts weakened on early trade. UK instruments led the broader sell-off after having outperformed Tuesday, suffering in part from rumours surrounding a potential leadership challenge in the ruling Labour Party. The high in yields was hit in late morning trade.
- But French Finance MInister Lescure's comments that he was "fairly confident" parliament would approve the contentious budget saw EGBs gain, and the national assembly's passing a suspension of the pension age rise, boosted perceptions of political stability and saw OATs extend outperformance.
- Weaker oil prices (an OPEC+ report showed price-negative supply-demand dynamics) also helped keep a lid on yields through the session.
- On the day, the German curve bull flattened, with Gilts bear steepening. Periphery spreads tightened alongside the OAT gains.
- Thursday's schedule includes UK Q3 / September GDP and monthly activity data, along with French labour market and Eurozone industrial production. In central bank communications, the BOE's Greene and ECB's Villeroy and Elderson make appearances, while we also get the ECB's latest Economic Bulletin release.
Closing Yields / 10-Yr EGB Spreads To Germany
- Germany: The 2-Yr yield is down 0.3bps at 1.998%, 5-Yr is down 1.2bps at 2.247%, 10-Yr is down 1.5bps at 2.643%, and 30-Yr is down 2.6bps at 3.228%.
- UK: The 2-Yr yield is up 0.4bps at 3.728%, 5-Yr is up 1bps at 3.867%, 10-Yr is up 1.1bps at 4.398%, and 30-Yr is up 1.9bps at 5.191%.
- Italian BTP spread down 1.7bps at 72.8bps / French OAT down 2.8bps at 73.6bps
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US STOCKS: Late Equities Roundup: IT & Materials Sector Remains in Lead
Oct-13 18:47
- Stocks well bid late Monday, but still recovering only about half of Friday's sell-off, prices are back near the top end of the day's range after some sporadic profit taking ahead midday. Overall trade was relatively subdued due to the Columbus Day holiday.
- Currently, the DJIA trades up 575.86 points (1.27%) at 46,057.31, S&P E-Minis up 98 points (1.49%) at 6,693, Nasdaq up 467.7 points (2.1%) at 22,674.98.
- Information Technology and Materials sector shares continued to lead the rally, semiconductor makers outperforming: ON Semiconductor Corp +10.47%, Broadcom Inc +9.76% after reports of an accelerated AI chip deal with OpenAI, Monolithic Power Systems +9.25%, Microchip Technology +6.97% and HP Inc +6.58%.
- Materials sector gainers included Albemarle Corp +8.25% apparently on a short squeeze tied to lithium mining, Freeport-McMoRan +5.16%, Newmont Corp +4.72%, Dow Inc +4.02% and DuPont de Nemours +3.65%.
- Conversely, Consumer Staples and Health Care sector shares led declines in the first half: J M Smucker Co -2.93%, Altria Group -2.52%, Monster Beverage -2.43% and Kenvue -2.16%. Pharmaceuticals weighed on the Health Care sector: Humana -2.02%, Eli Lilly & Co -1.31%, Regeneron Pharmaceuticals -1.28% and Edwards Lifesciences -1.27%.
USDJPY TECHS: Pullback Appears Corrective
Oct-13 18:30
- RES 4: 154.80 High Feb 12
- RES 3: 154.39 76.4% retracement of the Jan 10 - Apr 22 bear leg
- RES 2: 153.82 1.618 proj of the Sep 17 - 26 - Oct 1 price swing
- RES 1: 153.27 High Oct 10
- PRICE: 152.32 @ 15:53 BST Oct 13
- SUP 1: 150.92 High Sep 26
- SUP 2: 149.45 20-day EMA
- SUP 3: 148.34 50-day EMA
- SUP 4: 146.81 Trendline support drawn from the Apr 22 low
The underlying bullish trend condition in USDJPY remains intact and Friday’s pullback is for now, considered corrective. Note that the trend is overbought and a deeper retracement would allow this overbought set-up to unwind. The next important support lies at 149.45, the 20-day EMA. On the upside, a break of Friday’s 153.27 high, would resume the uptrend and open 154.39, a Fibonacci retracement point.
SOFR OPTIONS: Dec'25 SOFR Call Condors
Oct-13 18:09
- +6,000 SFRZ5 96.18/96.31/96.50/96.62 call condors, 8.0 ref 96.36
