FRANCE AUCTION RESULTS: IL OAT Results
Aug-21 10:01
| 3.15% Jul-32 OATei | 1.80% Jul-40 OATei | 0.10% Jul-53 OATei | |
| ISIN | FR0000188799 | FR0010447367 | FR0014008181 |
| Amount | E399mln | E393mln | E330mln |
| Previous | E379mln | E255mln | E380mln |
| Avg yield | 1.11% | 1.76% | 1.98% |
| Previous | 0.91% | 1.58% | 1.73% |
| Bid-to-cover | 3.17x | 2.73x | 3.31x |
| Previous | 3.28x | 2.99x | 3.16x |
| Avg Price | 113.53 | 100.46 | 60.02 |
| Low Price | 113.45 | 100.38 | 59.96 |
| Pre-auction mid | 113.399 | 100.228 | 59.656 |
| Prev avg price | 115.47 | 102.97 | 63.87 |
| Prev low price | 115.42 | 102.90 | 63.81 |
| Prev mid-price | 115.334 | 102.748 | 63.479 |
| Previous date | 22-May-25 | 22-May-25 | 22-May-25 |
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BONDS: 10-year Gilt/Bund Spread Tests 200bps Following UK Fiscal Data
Jul-22 09:38
The 10-year Gilt/Bund spread has widened 1.5bps today, piercing the 200bp handle for the first time in a month. This morning’s higher-than-expected UK PSNB print is driving the relative underperformance for Gilts.
- Broader core FI yields are facing some upward pressure today, following yesterday’s notable curve bull flattening. Gilt yields are 1.5-3bps higher, while German yields are up 0.5-1.5bps. Both curves have bear steepened on the session.
- Gilt futures are -17 ticks at 91.61, off session lows of 91.46. A bear cycle in Gilt futures remains in play, with initial resistance the 20-day EMA at 91.97. Bund futures are -11 at 130.34, still above the 50-day EMA which was pierced yesterday. A clear break of the EMA would undermine the recent bear theme and highlight a possible reversal.
- 10-year EGB spreads to Bunds are up to 1bp wider, with European equity futures down 0.6% today.
- BOE Governor Bailey is currently speaking to the Treasury Select Committee on the latest Financial Stability Report. Any references to UK inflation or the jobs market will be watched carefully.
- The GBP20.7bln UK PSNB figure for June was GBP6.6bln more than the year prior. The OBR projected a reading of GBP17.1bln, with BBG consensus standing at GBP17.5bln.
- In the Eurozone, the ECB’s Q2 Bank Lending Survey felt supportive of market expectations for one more 25bp cut this cycle - but does not signal a need to rush back into sequential rate cuts following a likely pause at Thursday's decision.
- This morning’s 1.125% Sep-35 Gilt Linker auction was strong (as expected), while German Green Bund supply was digested smoothly.
- Broader focus remains on Thursday’s flash PMIs and the ECB decision.
GERMAN AUCTION RESULTS: Green Bund Results
Jul-22 09:35
| 2.30% Feb-33 Green Bund | 2.50% Feb-35 Green Bund | |
| ISIN | DE000BU3Z005 | DE000BU3Z047 |
| Total sold | E500mln | E1bln |
| Allotted | E422mln | E931mln |
| Previous | E495mln | E2.386bln |
| Avg yield | 2.39% | 2.58% |
| Previous | 2.37% | 2.62% |
| Bid-to-offer | 3.01x | 1.92x |
| Previous | 3.49x | 1.05x |
| Bid-to-cover | 3.57x | 2.07x |
| Previous | 3.53x | 1.32x |
| Avg Price | 99.35 | 99.34 |
| Low Price | 99.35 | 99.34 |
| Pre-auction mid | 99.298 | 99.294 |
| Prev avg price | 99.53 | 98.98 |
| Prev low price | 99.52 | 98.96 |
| Prev mid-price | 99.478 | |
| Previous date | 17-Jun-25 | 08-Apr-25 |
BOE: Bailey Sees UK Experience With Steeper Curve Part of Global Phenomenon
Jul-22 09:25
Bailey speaking on global curves and the UK experience:
- "BANK OF ENGLAND'S BAILEY: WE HAVE SEEN STEEPER YIELD CURVES, THAT IS GLOBAL PHENOMENON" - Reuters
- UK EXPERIENCE IS NOT OUT OF LINE WITH OTHER MARKETS
- CAUSE OF STEEPER YIELD CURVE REFLECTS GREATER UNCERTAINTY ON TRADE POLICY"
He's speaking in front of lawmakers on the BoE's financial stability report - unlikely to get much on monetary policy specifically - but any references to UK inflation or the jobs market will be watched carefully. Livestream here: https://www.parliamentlive.tv/Event/Index/e1eb2a6b-6c37-43d3-a69b-566e1b7a84ab
