EGBS: /STIR: Bonds A Little Softer Post-ECB, Implied Rates A Little Firmer
Sep-12 13:51
EGBs away from session highs as ECB President Lagarde doesn’t seem too worried by downside risks to growth.
- Comments on the risks to the ECB’s central economic outlook pointed to a mix of downside risks to growth (the focus of the dovish leaning central bankers) and upside risks to inflation (the focus of the hawkish contingent).
- Lagarde stressed that she will not pre-commit when it comes to the October decision. highlighting data-dependence, while noting there is only a relatively short time until the next decision.
- Bund futures still stuck within yesterday’s range, despite printing fresh session highs and lows over the press conference.
- Downticks in equities provide support in recent trade.
- EUR 3m10 vol. to fresh session lows.
- Spreads to Bunds off session tights.
- Previously covered round numbers in BTP/Bunds (140bp) and OAT/Bunds (70bp) still limiting tightening moves.
- ECB-dated OIS little changed to 2bp less dovish vs. levels prevailing ahead of the initial decision.
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US TSY FUTURES: Tsys Extend Session Highs
Aug-13 13:46
- Treasury futures extend session highs in the last couple minutes, TYU4 taps 113-21 (+13.5) briefly, still below initial technical resistance at 114-03 (Aug 6 high).
- Some desks citing headline announcing Hamas has launched a couple missiles at Tel Aviv for the safe haven support. Any mention of imminent attack buffeted markets on Monday. However, today sees equities shrugging off a vanilla risk-off move by trading higher, SPX Eminis at 5417.0, Nasdaq nearing 17,000, Dow above 39,620.
- Yield curves continue to bull steepen: 2s10s +1.504 at -10.076, 5s30s +1.809 at 47.173.
- Projected rate cut pricing into year end gains slightly vs. late earlier morning levels (*): Sep'24 cumulative -40.5bp (-39.4bp), Nov'24 cumulative -73.4bp (-69.8bp), Dec'24 -105.6bp (-101.4bp).
EQUITIES: US Cash opening calls
Aug-13 13:27
SPX: 5,382.6 (+0.7%); DJIA: 39,466 (+0.3%/+109pts); NDX: 18,743.9 (+1.1%).
JPY: USD/JPY Slips to New Daily Lows, Some Eye Tel Aviv Rocket Headlines
Aug-13 13:25
- USD/JPY slipping to new daily lows - rate sheds around 50 pips over a few minutes on no new headlines or dataflow - JPY futures show a decent volume spike at 1414BST/0914ET, with over 3,500 contracts changing hands inside 60 seconds, making for comfortably the largest volumes of the day so far and topping that seen in the PPI reaction.
- Further weakness through today's lows exposes 146.68, the 23.6% retracement of the bounce off the pullback low printed in early August.
- Some eyeing reports of explosions being heard in Tel Aviv, with Israel's N12 News reporting that rockets launched from Gaza had landed off the coast - no casualties reported so far. Would mark the first time in a few months that rockets had been launched from Gaza into central Israel.
