EU CREDIT UPDATE: CREDIT UPDATE: EUR Market Wrap
May-24 11:35
- 2y/10y bunds are +1bp/flat after UK retail sales were much softer than expected, but the market impact was limited while German Q1 GDP confirmed flash estimates at 0.2% Q/Q and comments from ECB’s Schnabel added little new to the debate.
- Main/XO are flat/+1bp while FICM shows €IG/€HY at flat/+1bp with swap spreads implying similar moves vs. govies. Primary closed.
- IG curve movers include Thames Water (up to 18bp wider), Verallia (5-6bp wider on S&P outlook change), Acciona (5-6bps wider on guidance cut).
- SXXP is -0.5% with Autos and Retail the only sectors in the green. SPX futures +0.3%. Main €IG mover is Acciona -9%.
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Historical bullets
SCHATZ: Swap related trade
Apr-24 11:27
Schatz Swap trade, suggest Payer:
- DUM4 5.55k at 105.285.
OAT: Through Monday's low
Apr-24 11:21
Oat Swap related trade, suggest Payer:
- OATM4 ~3.28k at 125.61.
OUTLOOK: Price Signal Summary - Trend Needle In Bunds Continues To Point South
Apr-24 11:13
- In the FI space, the trend outlook in Bund futures is unchanged and remains bearish. The contract has traded to a fresh cycle low today. Key support at 131.23, the Feb 29 low, has been cleared. This confirms a resumption of the downtrend and attention is on 130.25, the 1.236 projection of the Mar 8 - 18 - 27 price swing. On the upside, firm resistance is at 133.05, the Apr 12 high. Short-term gains would be considered corrective. First resistance is at 131.81, the 20-day EMA. |
- A bearish theme in Gilt futures remains intact and gains are considered corrective. The contract traded lower last week, delivering a fresh cycle low of 96.01 on Apr 17. This maintains the bearish price sequence of lower lows and lower highs. Furthermore, MA studies have crossed, highlighting a bear-mode set-up. Scope is seen for an extension towards 95.96 and 95.41, the 1.764 and 2.00 projections of the Mar 12 - 15 - 22 price swing. Initial firm resistance is 98.23, the Apr 12 high. Initial resistance is at 97.69, the 20-day EMA.
