FOREX: FX OPTION EXPIRY
May-02 08:41
Expiries are everyday at 15.00UK/10.00ET, and big sizes (multi Yards) can sometime act as magnets.
Of Note:
USDJPY 1.08bn at 146.00.
EURUSD 2.39bn at 1.1285/1.1300 (mon).
USDCAD 2.66bn at 1.3865/1.3870 (mon).
USDJPY 1.8bn at 146.00 (mon).
EURUSD 1.49bn at 1.1250 (thu).
USDJPY 1.25bn at 145.00 (thu).
- EURUSD: 1.1290 (405mln), 1.1300 (422mln), 1.1315 (400mln), 1.1350 (210mln).
- USDJPY: 144.65 (459mln), 145.00 (718mln), 146.00 (1.08bn).
- USDCAD; 1.3800 (331mln), 1.3825 (743mln), 1.3850 (403mln), 1.3895 (678mln), 1.3900 (472mln).
- AUDUSD: 0.6400 (259mln), 0.6450 (729mln).
- NZDUSD: 0.5975 (210mln), 0.5980 (371mln).
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Historical bullets
EGBS: Spreads Biased Wider
Apr-02 08:36
Spreads to Bunds are biased wider with European equities on the defensive ahead of the “Liberation Day” tariff announcements.
- Major spreads to Bunds 0.5-2.0bp wider on the session, with GGBs seeing the most pronounced underperformance.
- Most sell-side analysts seem to hold a modest spread widening bias in the near-term, given downside risks to growth that U.S. tariffs present, although ECB easing is expected to mitigate some of the related widening pressure.
- Note that most spreads continue to trade closer to recent lows than recent highs.
BUNDS: German 10yr Yield could target the 2.65% level
Apr-02 08:23
- German 10yr Yield sees the 2.65% level close to that 129.54/129.60 resistance area, so far unchallenged,.
- Some likely positioning ahead of the Tariffs announcement later today at 16.00ET, but will be after hours for Europe (21.00BST).
Today, reference 129.41:
- 2.65% = 129.63.
2.60% = 130.15.
EGBS: Citi Retain Long Duration Bias Into Tariff Announcement, Eye IRISH In MT
Apr-02 08:11
Citi note that “even after adjusting for fiscal spending, Bunds lag by around 15bp on a regression with a basket of tariff-sensitive EUR equities”.
- They go on to write “into today’s tariff announcement, we prefer bullish/dovish exposure to EUR duration. For EGB spreads, the indifference towards richening Bund swap spreads has tended to be short-lived in the past”.
- “The recent EGB resilience might have been driven by relatively clean positioning, investors waiting for more clarity and prospects of more ECB rate cuts in case of punitive tariffs but ignores their growth implications.”
- As a result, they “retain bearish exposure to periphery spreads into the announcement, with the 10-Year BTP/Bund spread now close to the tight end of its range”.
- At a more granular level, they note that “tariff risks within EMU-11 seem most acute for Germany, Italy, and Ireland while Spain and France seem relatively shielded. This was likely behind the YtD underperformance of IRISH credit, which continued yesterday, despite still-strong fundamentals otherwise. These headwinds are likely to persist for now, although we believe value in the Irish credit is being built for the medium-term”.
