GERMANY: Germany To Withdraw Inflation-Linked Bonds From 2024
Nov-22 20:28
- "The Federal government has decided to withdraw from the market for inflation-linked bonds: From 2024, no further inflation-linked Federal securities will be issued, nor will already outstanding securities be reopened."
- "The currently outstanding inflation-linked Federal securities will continue to be tradable on the market. The remaining programme comprises four securities with a current total volume of EUR 66.25 billion and remaining maturities between 2.5 to 22.5 years"
- Press release here.
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US TSYS: 10Y Yields Reject 5% High, Fund Managers Buy Bonds
Oct-23 20:01
- Unwinding weekend short hedges centered on Israel-Hamas and BoJ sources triggered cheapening in Asia hours after 10Y yield climbed above 5% for the first time since Sep'07 earlier to 5.0187% high.
- Early block buy of +8,237 TYZ3 105-23 (buy through 105-22 post-time offer at 0839:08ET, DV01 $536,000) contributed to the early support followed by the long end after Pershing Square fund manager/CEO Bill Ackman tweeted he had covered shorts in Tsys in light of "too much risk in the world to remain short."
- Reuters reported asset manager Vanguard is bullish on longer-dated Treasuries after this year's brutal selloff, betting that the Federal Reserve is at the end of its rate hiking cycle and that the economy will slow next year.
- Short end SOFR futures remained weak (SFRU3-SFRM4 down 0.0025-0.020) despite Bill Gross announced buying of SOFR futures amid "INDICATIONS THAT US ECONOMY IS SLOWING SIGNIFICANTLY" Bbg.
- As a result, Treasury yield curves rejected mid-2022 highs, finished the session broadly flatter: 3M10Y -5.840 at -61.602 vs. -45.127 high, 2Y10Y -5.282 at -21.655 vs. -11.024 high.
- Projected rate hikes remained static into early 2024: November holding at 1.6%, w/ implied rate change of +.4bp to 5.333%, December cumulative of 5.7bp at 5.386%, January 2024 cumulative 9.4bp at 5.423%, while March 2024 slips to 5.3bp at 5.381%. Fed terminal at 5.438% in Jan'24. Fed terminal at 5.425% in Feb'24.
AUDUSD TECHS: Trend Needle Points South
Oct-23 19:30
- RES 4: 0.6616 High Aug 16
- RES 3: 0.6522 High Aug 30 and Sep 1, and the key resistance
- RES 2: 0.6445/6501 High Oct 11 / High Sep 29
- RES 1: 0.6393 High Oct 18
- PRICE: 0.6331 @ 16:11 BST Oct 23
- SUP 1: 0.6286 Low Oct 3 / 13 and the bear trigger
- SUP 2: 0.6272 Low Nov 3 2022 and a key support
- SUP 3: 0.6215 2.236 proj of the Jun 16 - Jun 29 - Jul 13 price swing
- SUP 4: 0.6170 Low Oct 13 2022 and a key support
A bearish threat in AUDUSD remains present and attention is on 0.6286, the Oct 3 / 13 low. A clear break of this support and bear trigger, would confirm a resumption of the trend and open 0.6215, a Fibonacci projection. Key trend resistance is unchanged at 0.6522, the Aug 30 and Sep 1 high. A break is required to highlight a reversal. Initial resistance to watch is at 0.6393, the Oct 18 high.
US TSY OPTIONS: BLOCK, Nov'23 10Y Ratio Put Spread
Oct-23 19:22
- 10,000 TYX3 106/106.5 2x1 put spds, 0.0 vs. 106-16/0.15% at 1515:20ET
