US DATA: Higher U/E Rate vs Payrolls Beat
Nov-20 13:38
- A sizeable beat for NFP growth in September (119k vs cons 51k) with a smaller two-month revision of -33k, mostly in Aug.
- It was supported by the government but private still saw a beat with 97k vs 65k expected, albeit with a slightly larger 2-mth revision of -41k.
- However, as the above unrounded u/e rate shows, it was a high figure at 4.44% (cons 4.3).
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EGB OPTIONS: Bund outright Put buyer
Oct-21 13:37
RXF6 128.50p, bought for 32 in 3.4k.
US TSYS: BLOCK: Dec'25 10Y Buy
Oct-21 13:34
Contributing to recent support, 10Y contract buy posted at 0906:39ET
- +6,000 TYZ5 113-23.5, through 113-23 post time offer at 0906:39ET, DV01 $408,200.
- The 10Y contract trades 113-25.5 last (+7)
EUROPEAN FISCAL: Eurozone-wide r-g Falls A Tenth; Key To Fiscal Sustainability
Oct-21 13:32
We have written a lot about the importance of r-g differentials for debt sustainability in recent months. The Eurozone-wide r-g (i.e. the average interest rate on debt minus the nominal growth rate) fell a tenth to -1.7pp in Q2. A reminder that a lower value is better, indicating a country/region’s interest expenses can be more than covered by economic growth.
- Across the four major Eurozone economies, r-g fell a tenth in Italy to 0.4pp, but this was still the third consecutive quarter in positive territory, We’ve previously highlighted that a weak growth trajectory appears to be the largest challenge facing continued Italian fiscal consolidation
- In France, r-g was unchanged at -0.7pp, but is still up from an average of -2.8pp in 2024. Although PM Lecornu survived two no confidence votes last week, French political/fiscal risks remain prevalent. These risks are weighing on domestic confidence and contributing to a subdued growth outlook, reflexively worsening the fiscal outlook.
- German r-g rose a tenth to -0.7pp. Recent growth indicators suggests activity was sluggish in Q3 (following on from a weak Q2), with the anticipated fiscal policy impulse yet to take hold.
- Finally, in Spain, r-g rose four tenths to -3.4pp, but remains at healthy levels thanks to strong growth performance. The nominal Government spending freeze implied by Spain’s inability to pass a budget since 2022 are also helping keep fiscal metrics in check.
