USD: Greenback Bounce Extends Into London Close
Apr-14 15:12
- The dollar continues to pare the week's losses into the Friday London close, with the greenback recovering off today's weekly lows printed against the EUR, GBP, AUD, NZD and others.
- USD's bounce comes as an extension of the reaction following the bumper University of Michigan sentiment release: 1y inflation expectations came in well ahead of forecast (4.6% vs. Exp. 3.7%, the biggest beat on consensus since 2021).
- Solid bank earnings likely a contributor for the USD upside also, with solid earnings and revenue posted by the likes of Wells Fargo, JP Morgan and Citigroup allaying any fears of instability among the biggest US banks.
- The USD Index remains over 1% lower off the Monday high, but is paring losses, as short-covering adds to the dynamic.
- 101.7975 marks the 50% retracement of the week's range, and would prove constructive for any recovery toward the 103.4456 50-dma.
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GILTS: Budget largely in line with expectations; consultation agenda due out shortly
Mar-15 15:08
- The Budget today threw up few surprises as expected. We had already received the headline measures on the energy price guarantee and the other big measures had been well telegraphed in the press: extra money on defence, fuel duty freeze for 12 months, replacement for the superdeducatable (to encourage investment) and an extension of the 30 free hours of childcare to children aged 9 months and above (rather than just for 3+ year olds at present).
- The gilt remit of GBP241.1bln was close enough to expectations to cause no real market moves (the median expectation was GBP230.8bln from the 11 previews that we read) and the maturity split was also fairly close to expectations.
- Overall, the gilt market has been much more focused on other events but with 2-year gilts underperforming Schatz and 2-year USTs. 2-year gilt yields are up 18bp at writing versus increases of 40+bp for Schatz/2-year USTs.
- This has led to the UK curve seeing more of a parallel shift versus the bull steepening seen elsewhere.
- Note that the DMO is due to release the consultation agenda for Monday's investor/GEMM meetings at 15:30GMT, which should give us more of an insight into April to June issuance.
MNI EXCLUSIVE: Italy's Plans For New Retail Bond
Mar-15 14:53
MNI follows up on plans for the sale of a new Italian retail bond. -On MNI Policy MainWire now, for more details please contact sales@marketnews.com
GILTS: EGB / gilt supply calendar updated
Mar-15 14:47
Note that we have updated our EGB/gilt supply calendar with the placeholder dates for 23/24 gilt issuance. It is available here.
