CROSS ASSET: Equities are falling.
Aug-03 07:27
- Stoxx600 sees Tech, Telecom, Chemical, Media as the worst performers, Banks are still holding somewhat, likely helped by the higher Yields.
- VGU3 has cleared last week's low, and the street will now look for support at the 4297.00 area, ahead of 4282.00 Low Jul 11.
- Yen seems to be benefitting from safer Haven flow, at session high against the AUD, EUR, GBP, and now paring losses against the USD, despite the jump in US Yields.
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GILTS: Weakness In Bunds & Impending Supply Weighs
Jul-04 07:25
Gilts are biased lower by the move in Bunds, leaving the major cash benchmarks in the former running 3-4bp cheaper early on, as the curve steepens at the margin and 10-Year yields edge closer to the 4.50% mark. Gilt futures have breached recent session lows to last trade -40 or so. That leaves bears looking to the 20 June low & bear trigger (93.88) as next meaningful support level.
- The impending round of Gilt supply will also be weighing on the space, adding to the pressure derived from Bunds.
- The SONIA strip sees some twist steepening pressure, while terminal pricing on the BoE-dated OIS strip nears 6.35% in policy rate terms.
- Local headline flow has seen some focus on funding gaps for local authorities, although that isn’t a particularly new/actionable story. Elsewhere, we saw some positive musings from Sainsbury’s re: relief surrounding food price inflation.
GERMAN AUCTION PREVIEW: 0.10% Apr-33 ILB
Jul-04 07:25
On offer today:
- E500mln of the 0.10% Apr-33 ILB (ISIN: DE0001030583)
Timing: Results will be available shortly after the auction closes at 1030 BST / 1130 CEST.
See PDF for full auction preview:
BONDS: Futures are breaking lower - Gilt targets 4.5%
Jul-04 07:21
- Lack of liquidity helps exacerbate the moves in Govies, as Bund leads Global Bond lower, after breaking the 133.09 initial support, and dipping below 133.00, ahead of next support at 132.62 (equates to 2.5% Yield).
- Gilt opened close to the calls, but worth keeping a very close high on the contract, slowly edging towards the 4.50% mark in Yield.
- This level has been targeted/projected by many desks of late.
Today reference 94.45:
- 4.50% = 94.17.
