CROSS ASSET: Equities Slide, USD Slips as Trump Targets Apple's India Production
May-23 11:25
Trump writes: "I have long ago informed Tim Cook of Apple that I expect their iPhone’s that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else. If that is not the case, a Tariff of at least 25% must be paid by Apple to the U.S. Thank your for your attention to this matter!"
- Equities dip on that Trump tweet - the e-mini S&P swiftly slips to a new daily low of 5835.00 as Apple shares slide pre-market - now indicated to open lower by 4%. USD/JPY follows suit, with the price showing through earlier lows to test the Y143.00 handle and narrow the gap with Y142.81.
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EUROZONE ISSUANCE: 7-year BTP Italia to be launched end of May
Apr-23 11:19
- The MEF has announced that it will launch its first BTP Italia since March 2023 with an offering for retail investors between 27-29 May and for institutional investors on 30 May. As usual, the BTP Italia is linked to Italian inflation (rather than Eurozone inflation).
- The guaranteed minimum annual (real) coupon rates will be announced on Monday 26 May (likely ISINs announced then too). There will be the usual 1% bonus to retail investors who hold the issue from launch until maturity.
- The maturity date will be 4 June 2032.
- The last BTP Italia launched in March 2023 had a 5-year maturity and saw E8.563bln sold to retail investors and E1.353bln sold to institutional investors.
OUTLOOK: Price Signal Summary - Gilt Rally Extends
Apr-23 11:17
- In the FI space, Bund futures continue to trade closer to their recent highs. A bull cycle remains in play and the pullback between Apr 7 - 9 is considered corrective. A fresh short-term cycle high on Apr 7 reinforces a bullish theme. The contract has recently cleared 131.14, 76.4% of the Feb 28 - Mar 11 bear leg. This opens 132.56 next, the Feb 28 high. Firm support lies at 130.31, the 20-day EMA.
- Gilt futures are trading sharply higher today, confirming an extension of the recovery that started Apr 9. The rally cancels a recent bearish theme. The climb has resulted in a breach of 92.63, the Apr 8 high, and the contract is approaching 93.44, the 76.4% retracement of the Apr 7-9 sell-off. A break of this level would strengthen the current bull cycle and expose 94.50, the Apr 7 high and a key resistance. Support to watch is 91.97, the 20-day EMA.
OPTIONS: Larger FX Option Pipeline
Apr-23 11:17
- USD/JPY: Apr24 Y140.00($1.6bln); Apr28 Y140.00($1.1bln)
- USD/CAD: Apr25 C$1.3800($1.9bln), C$1.4000($1.6bln)
