CREDIT PRE-MARKET: EUR Market Wrap
- 2y/10y bunds closed -3bp/-2bp at 2.15%/2.53% near intraday tightest levels -Dm team flagged initial risk-off cross market reaction to the cancellation of the Zelenskiy-Kellogg press conference though this moderated. USTs closed flat/-3bp at 4.27%/4.51%.
- Main/XO ended +0.5bp/+3bp at 52.3bp/284bp while €IG was -0.4bp at 0.86% (Corps -0.5bp at 0.81%, Fins -0.3bp at 0.92%, €HY +2bp at 2.77%). $IG was +0.5bp at 0.77% (Corps +0.6bp at 0.78%, Fins +0.3bp at 0.77%, $HY -1.1bp at 2.62%).
- SX5E/SPX futures closed +0.1%/-0.4% at 5472pts/6137pts. €IG movers included ISS A/S (+13%), Baxter International Inc (+9%), Repsol SA (+8%), LKQ Corp (+6%), Carrefour SA (-9%), Walmart Inc (-7%), Goodman Group (-5%), MTU Aero Engines AG (-5%).
- SX5E/SPX futures are flat/-0.1% this morning. JGB futures are higher after comments by BoJ Governor Ueda in parliament drove volatility. USTs saw the belly of the curve has outperform, there hasn't been too much in the way of headlines. HK and mainland China equity markets are posting strong gains, led by a robust tech rally following Alibaba's stellar earnings report.
- Looking ahead, we have UK retail sales, along with preliminary PMI prints. EU PMIs are also due, along with those in the US. Fed speaks see Jefferson and Daly on tap.
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USDJPY TECHS: Support Remains Intact For Now
- RES 4: 159.45 High Jul 12
- RES 3: 159.26 0.618 proj of the Sep 16 - Nov 15 - Dec 3 price swing
- RES 2: 158.08/87 High Jan 15 / 10 and the bull trigger
- RES 1: 156.46 20-day EMA
- PRICE: 155.86 @ 06:56 GMT Jan 22
- SUP 1: 155.02/154.78 50-day EMA / Low Jan 21
- SUP 2: 154.48 Trendline support drawn from the Sep 16 ‘24 low
- SUP 3: 153.16 Low Dec 17
- SUP 4: 152.46 Low Dec 13
The trend condition in USDJPY is unchanged and remains bullish. The latest pullback is considered corrective. The pair has traded through the 20-day EMA and an extension would signal scope for a deeper retracement. Support to watch is 155.00, the 50-day EMA, and 154.48, a trendline drawn from the Sep 16 ‘24 high. A clear breach of both levels would highlight a stronger reversal. Key resistance and the bull trigger is 158.87, the Jan 10 high.
MNI EXCLUSIVE: MNI Speaks To UK Pay Consultancy
A leading pay consultancy looks at UK earnings outlook. On MNI Policy MainWire now, for more details please contact sales@marketnews.com
EUROZONE ISSUANCE: EGB Supply
Spain and Finland have both announced syndication mandates while Germany and France are both still due to hold auctions this week and Portugal will hold a reverse auction. Already this week, the EFSF, France and Lithuania have held syndications, whilst Slovakia and Germany have held auctions. We look for estimated gross issuance for the week at E57.2bln, up from E42.2bln last week.
- On Tuesday, Finland announced a mandate to issue E3bn WNG of a new 20-year RFGB maturing 15 April 2045. This was fully expected by MNI this week and we had also pencilled in the E3bln WNG size. We expect the transaction to take place today.
- Also on Tuesday, Spain announced a mandate for a new 10-year Obli maturing on 30th April 2035. MNI fully expected this and we pencil in a E10-15bln transaction size to take place today.
- Today, Portugal will hold a reverse auction to buyback the 2.875% Oct-25 OT (ISIN: PTOTEKOE0011).
- Finally today, Germany will return to the market to hold a 15-year Bund auction, looking to sell E1.5bln of the 2.60% May-41 Bund (ISIN: DE000BU2F009) alongside E500mln of the 2.50% Jul-44 Bund (ISIN: DE0001135481).
For more details on issuance this week and next week see the full document here: EZ250122.pdf
