US: FED Reverse Repo Operation
NY Fed reverse repo usage slips back to $2,258.222B w/ 102 counterparties, compares to prior $2,267.130B. Compares to high usage for 2023: $2,375.171B on Friday March 31, 2023; all-time record high of $2,553.716B reached December 30, 2022.
NY Federal Reserve/MNI
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US: Commercial Banking Update: Further Large Deposit Drawdown
Friday’s H8 data for weekly commercial bank balance sheet data showed:
- * Large Banks Saw Withdrawals In Reversal Of Haven Seeking, MMF Assets Suggest Pace To Slow
- * Loans & Leases Pull Back After Broad-Based Sharp Increase
We include a summary of the Dallas Fed Banking Conditions Survey released today, which showed only modest further credit tightening & deterioration in loan demand.
Full report here: https://marketnews.com/markets/pdfs/u-s-commercial-banking-update-further-large-deposit-drawdown
OPTIONS: Limited Schatz Downside In Quiet Options Session
Monday's Europe rates/ bond options flow included:
- DUK3 105.20/104.80 1x1.33 ratio put spread bought for 7 in 7.5k
BONDS: EGBs-GILTS CASH CLOSE: From Bear Flattening To Bull Flattening
European bonds rallied after an early selloff, with Bunds and Gilts ending Monday's session stronger.
- Yields jumped on the open as oil prices shot higher on an unexpected OPEC+ output cut announcement made over the weekend. The German and UK curves bear flattened.
- But the move reversed later in the session, with curves ultimately bull flattening. A very weak US ISM manufacturing reading was a key driver in the European afternoon, with yields hitting session lows.
- ECB hawk Holzmann said a 50bp hike in May was "still on the cards", with the OPEC+ decision adding to inflation on the margin. That bumped up ECB May hike pricing slightly, but didn't have much of an impact further down the strip, and reversed alongside the broader rate move.
- ECB and BoE terminal pricing finished basically flat on the day, after early 5-6bp rises.
- Periphery EGB spreads widened, with the exception of Portugal (possibly follow-through from Friday's funding announcement).
- Comments by BoE's Pill are the highlight of Tuesday's docket.
Closing Yields / 10-Yr Periphery EGB Spreads To Germany:
- Germany: The 2-Yr yield is down 0.9bps at 2.674%, 5-Yr is down 2.3bps at 2.287%, 10-Yr is down 3.7bps at 2.255%, and 30-Yr is down 5.7bps at 2.306%.
- UK: The 2-Yr yield is down 5.4bps at 3.39%, 5-Yr is down 5.7bps at 3.3%, 10-Yr is down 6bps at 3.43%, and 30-Yr is down 8.1bps at 3.758%.
- Italian BTP spread up 4.1bps at 184.6bps / Portuguese down 0.9bps at 82.3bps
