JAPAN: Finance Ministry Eyeing Cut In Super-Long Issuance – Reuters
Dec-24 09:15
- Reuters reports (link to full report) that the Japanese finance ministry “will likely reduce new issuance of super-long government bonds next fiscal year to around 17 trillion yen ($109 billion), the lowest level in 17 years”.
- They cite two government sources, “nodding to market fears of oversupply that have lifted yields for these notes to record highs.”
- The piece also notes the plan for next fiscal year will also hold off increasing 10Y JGB issuance, and the ministry “will consider reducing issuance of 20-, 30- and 40-year JGBs next fiscal year by 100 billion yen each per month”.
- “As a result, total issuance of super-long bonds next fiscal year would fall to the lowest since 2009, and below levels planned for the current fiscal year ending in March 2026."
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FRANCE: OATs Unfazed As National Assembly Rejects Revenue Section Of '26 Budget
Nov-24 09:03
The 10-year OAT/Bund spread has narrowed ~0.5bps alongside peers today, with no material negative spillover from weekend political developments. The National Assembly overwhelmingly rejected the Revenue section of the 2026 budget, with the initial draft of the bill now moving to the Senate for review. We highlighted throughout last week that there was a clear lack of support for the Revenue bill, which had contributed to modest OAT/Bund widening back to ~76bps (e.g. here)
- In addition to the bad news being priced in through last week, intraday movements have been contained by optimistic signals from policymakers on continued budget negotiations. Finance Minister Lescure noted that “I’m convinced that the majority of parliamentary groups will be able to find the necessary common ground that will allow our country to have a budget”, while a Socialist source told Le Parisien that “The negotiations will continue until the end of the year”.
- This suggests PM Lecornu’s position as PM is stable, at least for now. That said, the outcome of negotiations suggests the PM’s 4.7% 2026 deficit target is unlikely to be met.
- The Social Security section of the budget has been reviewed by the Senate, and needs to be fully approved by December 12. The Revenue section meanwhile must be finalised by December 23. If these deadlines are not met, the government may need to pass a special law to roll over the existing 2025 budget, so that fresh negotiations can continue early next year.
MNI: GERMANY NOV IFO BUSINESS CLIMATE INDEX 88.1
Nov-24 09:00
- MNI: GERMANY NOV IFO BUSINESS CLIMATE INDEX 88.1
FOREX: FX OPTION EXPIRY
Nov-24 08:59
Of note:
EURUSD 1.55bn at 1.1500/1.1520.
EURUSD 1.38bn at 1.1625 (tue).
AUDUSD 5.59bn at 0.6450/0.6535 (wed).
EURUSD 1.01bn at 1.1525 (wed).
- EURUSD: 1.1500 (773mln), 1.1520 (780mln), 1.1550 (565mln).
- GBPUSD: 1.3150 (269mln).
- USDCAD: 1.4045 (319mln).
