FOREX: Goldman Flag Outsized Long Setting During Recent USD Rally

5-year

• Spread set at MS + 22bp (guidance was MS + 24bps area)
• Tranche Size Set: E5bln
• Books closed in excess of E92bln (inc E4.5bln JLM interest)
• HR: 99% vs. 2.20% Oct-30 Bobl
• Maturity: 14 October 2030
• ISIN: EU000A4EG021

30-year

• Spread set at MS + 119bp (guidance was MS + 121bps area
• Tranche Size: E6bln (increased from E5bln, MNI had noted the potential to increase)
• Books closed in excess of E107bln (inc E6.85bln JLM interest)
• HR: 93% vs. 2.90% Aug-56 Bund
• Maturity: 12 October 2055
• ISIN: EU000A4EG039

For both:

• Settlement: 16 September 2025 (T+5)
• Coupon: Long first
• JLMs: Barclays / BofA / CACIB / LBBW / MS (B&D/DM)
• Timing: Hedge deadline 14:15BST / 15:15CET

From market source / MNI colour

Latest source reporting on Italy from Bloomberg: 

• "Italian officials preparing the government’s budget are assuming as much as €13 billion ($15.3 billion) in extra fiscal space because of lower borrowing costs, according to people familiar with the matter."
• "That sum is the total of €5 billion saved this year and a projected €8 billion for 2026, said the people, who declined to be identified because the calculations are confidential. They said officials in Rome will use those numbers as they model a budget that must be presented to parliament by mid-October".
• "While such assumptions are hostage to fortune, such a multi-billion-euro boon would highlight how fiscal discipline and political stability under Prime Minister Giorgia Meloni are combining to boost the public finances."
• "While the people said officials are factoring in 0.6% growth in 2025, that’s down from an original target of as much as 1.2%. For next year, the assumption is for a slight acceleration to 0.8%, they said. "

No reaction in the 10-year BTP/Bund spread to the story - which isn't too surprising.

• Secured Overnight Financing Rate (SOFR): 4.40% (-0.02), volume: $2.872T
• Broad General Collateral Rate (BGCR): 4.39% (-0.01), volume: $1.151T
• Tri-Party General Collateral Rate (TCR): 4.39% (-0.01), volume: $1.120T
• (rate, volume levels reflect prior session)