OPTIONS: Expiries for May29 NY cut 1000ET (Source DTCC)
May-29 09:13
- EUR/USD: $1.1200(E784mln), $1.1300-15(E540mln)
- USD/JPY: Y144.80-00($2.1bln)
- USD/CAD: C$1.4355-75($1.5bln)
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FOREX: Greenback Firmer as Trump Team Look to Shift Focus to Taxes
Apr-29 09:13
- The greenback is firmer, reversing a small part of the minor losses posted into the Monday close. Flow remains a key driver for currency markets here, with price action yesterday consistent with flow drivers marked by month-end value date on Monday. Most corporate and rebalancing flow models point to USD buying for the end of April, which may be showing through in the price action so far Tuesday, given the minimal headline flow.
- Trump's schedule is pretty contained Tuesday, keeping focus on any reports concerning the progress of trade deals - as cabinet members continue to talk up the prospects of deals with Asian nations - and in particular India - which could be the first agreements to cross the line and avoid a return of sky-high tariffs.
- Treasury Secretary Bessent - seen as the most market-friendly member of Trump's cabinet met yesterday with several senior members of Trump's economic team to make the passage of tax legislation a top priority for the party. The meeting set July 4th as a key date going forward, the date by which the team look to achieve the tax overhaul and reset the public's view that this administration has a poor grasp on the economy.
- The USD is firmer against all others in G10, but CAD also trades well following the election results that show Carney's Liberals extending their time in office. EUR/CAD is holding below the 1.5800 handle, keeping the shallow bounce theme and raising the importance of 1.5668 support ahead.
- Event risk picks up Tuesday with the publication of April economic confidence data from the Eurozone and the advance trade balance release, JOLTS job openings for March and the latest consumer confidence data from the US. Central bank speak is still contained as the Fed remain inside their pre-meeting media blackout period. ECB's Villeroy and BoE's Ramsden are set to speak, however.
EUROZONE DATA: Credit Growth Firms Again Although Impulse Stabilising
Apr-29 09:07
- Private sector lending growth continued its steady acceleration in March, rising two tenths to 2.6% Y/Y or three tenths to 2.0% Y/Y when adjusting for sales & securitisations (highest since Jun 2023)
- Adjusting for sales & securitisations, lending growth to both non-financial corporates (NFCs) and households accelerated two tenths to 2.3% Y/Y (highest since Jul 2023) and 1.7% Y/Y (highest since Jun 2023) respectively.
- Spain leads lending growth to households (2.6% Y/Y) with France lagging (0.7% Y/Y), although France leads NFC growth (3.1% Y/Y) whilst Italy is the only country still contracting (-0.9% Y/Y but from -4.0% Y/Y as recently as July).
- The Eurozone credit impulse metric of 3mth flows vs 3mths a year ago has broadly plateaued so far in 2025, at around 2% GDP after a large swing from the -5 to -6% GDP seen in mid-2023 when credit growth started to slow abruptly - see top right chart.
- On this relative impulse basis, Spain leads (3.4% GDP), followed by Italy (2.5%), France (1.2%) and Germany (0.6%).
- Separately, Eurozone M3 money supply surprisingly eased to 3.6% Y/Y (cons 4.0) from a downward revised 3.9% (initial 4.0) for its softest since Dec. For rough context, it averaged 5.0% Y/Y through 2019.
GILT AUCTION RESULTS: 1.25% Nov-54 Linker Gilt
Apr-29 09:05
| 1.25% Nov-54 Linker | Previous | |
| Amount | GBP0.90bln | GBP1.00bln |
| Avg yield | 2.175% | 2.126% |
| Bid-to-cover | 3.31x | 3.06x |
| Avg price | 79.907 | 80.714 |
| Pre-auction mid | 79.716 | 80.644 |
| Previous date | 14-Jan-25 |
